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June 8, 2017

IFU CELEBRATES 50 YEARS WITH SUSTAINABLE INVESTMENTS

On 7 June 2017, it is 50 years since the Danish parliament decided to establish IFU – the Investment Fund for Developing Countries. Since then, the fund has conducted more than 1,200 investments in over 100 developing countries. Total contracted investments have rounded almost DKK 19bn and more than 570,000 jobs have been preserved and generated in the investment countries.

In June 1967, the Danish parliament decided to establish IFU – the Investment Fund for Developing Countries.

IFU’s purpose is to create economic growth and social progress in developing countries via investments in the private sector. This is durable because IFU is based on a commercial platform and offers risk capital and advice to companies wishing to do business in one of the 147 developing countries that IFU can invest in.

– IFU is based on a commercial platform because we believe that investments in business is a good basis for making progress in developing countries, said Tommy Thomsen, CEO at IFU.

Billions invested in deveoping countries

In the beginning, the interest for private investments in developing countries was limited, but this has changed dramatically. Today, IFU has contributed to more than 1,200 investments in over 100 countries in Africa, Asia, Latin America and parts of Europe. In total, IFU has contracted investments for almost DKK 19bn.

The investments have been conducted based on a state contribution, which since then has been repaid. At the same time, IFU has built up a capital for a capital for DKK 3bn.

– The background for our success is that we are commercial and therefore continuously generate returns that both cover our operating costs and enable us to invest in new projects, said Tommy Thomsen.

More than DKK 600m in corporation tax in developing countries

Over the years, the many investments have made important contributions to the development of the investment countries.

Among other things, more than 570,000 jobs have been preserved and generated. The employees have received training, they have had their skills upgraded and have earned an income, which have helped them to improve their living conditions. Additionally, knowledge and technology have been transferred, new infrastructure has been built and businesses have paid taxes. Over the past two years, the approximately 200 companies that IFU is currently in corporation with have reported corporation tax for more than DKK 600m in developing countries.

– We are very proud of our contribution to improving the living conditions for people in developing countries. This applies both directly to the companies we invest in, but also to the derived effects in the form of tax payments that can be used for public investments in, among other things, health and education, said Tommy Thomsen.

IFU’s investments support the new Sustainable Development Goals

The UN’s new Sustainable Development Goals, which are e.g. aimed at eradicating poverty, combating hunger and ensuring a better climate, are clearly in line with IFU’s purpose and the tasks the fund has solved over the past 50 years.

The novelty of the goals includes an acknowledgment of the fact that the private sector is crucial for financing and realising the goals by 2030. IFU has already begun to solve this task through the establishment of a climate fund and an agribusiness fund based on capital from public and private investors.

– With the Danish Climate Investment Fund and the Danish Agribusiness Fund, we have embarked on a new path, where we can mix public and private capital with IFU’s 50 years of experience in sustainable investments in developing countries and thereby increase our efforts significantly. This is also the reason why we have been able to double our investment volume over the last couple of years, so we now invest more than DKK 1 billion a year, says Tommy Thomsen.

The next step is the establishment of a Sustainable Development Goals Fund, which will ensure a significant billion contribution to development in developing countries while generating a solid return for investors, who are expected to be Danish pension funds and private funds.

– We hope to succeed with the establishment of the new SDG fund, which will be the first of its kind in the world and mark IFU’s continued commitment to making the world a better place, said Tommy Thomsen.