An annual statement from the Industrialization Fund for Developing Countries show that the number of investments were somewhat higher than the year before. The total amount invested more than doubled.
The Industrialization Fund for Developing Countries (IFU) is a self-governing fund established by an act of government, which offers to participate in Danish companies’ investment projects in the developing countries. Most Danish companies make use of this opportunity for financial investment risksharing and advice.
51 Investments
Last year the Fund participated in 51 investments compared to 43 the previous year. 24 of the project companies were new. For the remainder applies that additional capital was invested in already existing projects.
The projects are either production or service companies. Most often they are established as so-called joint ventures, in which the Danish company together with a local partner establish a company, which they manage jointly.
Normally the Industrialization Fund for Developing Countries participate the first 6-10 years contributing a.o. with knowledge of the country in question and experience from other projects. Once the new company is well consolidated, IFU withdraws and sells its shares. The funds thus made available can be invested in new projects.
Investments Amounting to DKK 430 Million
In 1999 the total investments of the Fund amounted to DKK 430 million against DKK 176 million the previous year. The private investors and other financing institutions invested DKK 2,200 million in the new projects.
“The money and advice of the Industrialization Fund are often the incentive needed in order for the private investors to take the risk by investing in the developing countries. With comparatively small amounts the Fund can start many projects. Every time the Industrialization Fund invested DKK 100 in 1999 others invested DKK 800 in the same projects”, says the Fund’s managing director Sven Riskær.
The investments in 1999 have been estimated to create 5,900 jobs in the developing countries. Furthermore, they create exports from Denmark worth approximately DKK 1,160 million equivalent to approximately 2,300 jobs for one year.
More in Africa – in Cuba for The First Time
Since 1997 the Industrialization Fund has made a special effort to promote Danish investments in Africa. Prior to 1997 there were 4-5 new projects in Africa every year. In 1999 the number reached 11. Measured in DKK IFU’s African investments have risen from DKK 20 million before 1997 to approximately DKK 180 million last year.
However, India is still the country that attracts most Danish companies. Here the Industrialization Fund participated with 8 investments in 1999. Traditionally, Latinamerica seems to be furthest away from a Danish investment point of view. Still, 8 investments were made in 1999. One of them was in Cuba – and that is the first time the Industrialization Fund participates in a project in this island-country, which has finally – however still hesitantly – begun to open up for foreign investments.
Sven Riskær
Managing Director