18 September 2023


The ground-breaking reform of IFU means that the fund can invest up to EUR 2bn more in developing countries. Thereby, IFU can increase its efforts significantly within financing of the green transition, development in Africa and fragile states, as well as the achievement of the Sustainable Development Goals towards 2030.

At the UN General Assembly, Danish Prime Minister, Mette Frederiksen, announced a reform of the Danish development finance institution the Investment Fund for Developing Countries (IFU). IFU’s capital under management will be increased from EUR 2.1bn (2022) to around EUR 4.7bn in 2030. This will significantly increase IFU’s opportunities to contribute to economic growth, green transition and sustainable development in the developing countries, thereby supporting the achievement of the 17 UN Sustainable Development Goals.

“The reform of IFU is ground-breaking for the Danish development assistance, and it is important that we can present it at a time that calls for more financing of developing countries. We need new tools to free more private capital, and IFU is ready to deliver that to an even higher degree. It is important to the climate, the developing countries and Denmark’s role as a green pioneer.”

Dan Jørgensen, Minister for Development Cooperation and Global Climate Policy.

“We can only achieve the Sustainable Development Goals if we mobilise additional private capital to be invested in the developing countries. Therefore, I am very pleased that the reform also provides an opportunity for IFU to establish a new Danish SDG Investment Fund. It will enable IFU to build on the good collaboration and the solid results achieved with the Danish pension funds and private investors in the first Danish SDG Investment Fund, which IFU has now invested,” said Michael Rasmussen, Chairman of IFU’s Board of Directors.

”The Government’s decision to increase the financing for IFU significantly means that we can increase our efforts in the developing countries and contribute further to support the green transition and create more just and inclusive societies, which can improve the living conditions of the most vulnerable people, in particular. We look forward to making an even greater difference, and we will do our very best to live up to the trust,” said Torben Huss, CEO of IFU.

IFU has been a leading player within Danish development assistance for more than 50 years and proved to be an innovative international player, amongst others through the establishment of the Danish SDG Investment Fund in a public-private partnership with Danish pension funds. With the IFU reform, IFU enters a new era with an ambitious vision to contribute even more to solving the many challenges faced by developing countries today.

Main points of the reform of IFU:
The reform of IFU will strengthen IFU’s contribution to achieving the Sustainable Development Goals and the Paris Agreement. The reform will lead to strongly intensified action against climate change, increased efforts in Africa and significantly greater involvement in fragile states, including Ukraine.

With the reform, IFU will also continue the successful public-private partnership in the Danish SDG Investment Fund by paving the way for a new EUR 670m SDG Investment Fund, which is expected to be financed with approx. EUR 400m from private investors, wishing to make sustainable investments. Specifically, the reform will ensure:

  1. More climate: IFU’s contribution to climate financing will increase from EUR 268m a year (2022) to between EUR 670 and EUR 940 a year.
  2. More Africa: At least 50% of IFU’s investments must be made in Africa. Expected investments of more than EUR 1bn in the period.
  3. Fragile states, including Ukraine: Expected investments of EUR 470m in the period.

Facts about IFU:
IFU (Investment Fund for Developing Countries) is Denmark’s development finance institution. IFU was established in 1967 and is part of the Ministry of Foreign Affairs. The purpose of IFU is to promote investments supporting sustainable development and achievement of the Sustainable Development Goals in developing countries. Investments are made on commercial terms in the form of equity, loans and guarantees for private companies in developing countries and emerging markets in Africa in particular, but also in Asia, Latin America and parts of Europe. IFU focuses on supporting the green transition and contributing to the development of just and inclusive societies.

Facts about the reform of IFU:
The reform will increase the capital managed by IFU from EUR 2.1bn (2022) to around EUR 4.7bn in 2030. The reform is financed through two main tracks:

  1. Capital contribution through the development assistance: EUR 67m annually from 2024 to 2030
  2. Access to the central government re-lending scheme at Danmarks Nationalbank: EUR 1.8bn towards 2030