CAPITAL AND ADVICE

    RISK CAPITAL

    IFU provides risk capital in the form of equity, loans and guarantees

    IFU provides risk capital for companies wishing to do business in developing countries and emerging markets in Asia, Africa, Latin America and parts of Europe.

    Our investments are made on a commercial basis, and we offer funding in the form of:

    • equity
    • mezzanine financing (equity-like loans)
    • loans
    • guarantees

    IFU is an active investor. We have a long-term investment horizon and invest directly in the company that is established in the investment country. Consequently, we share the financial risk with our partner.

    IFU may participate both in the creation of new businesses, joint ventures between a Danish and local partner, through the acquisition of existing companies and projects with Danish interest.

    Big and small investments

    IFU will always be a minority investor and typically participate with about 30 percent of the total investment. Consequently, additional funding of the projects is necessary. This may be through Danish or local funding or for example through regional development banks.

    IFU can finance a project with up to DKK 100 million. Through IFU Investment Partners (IIP), IFU can provide additional share capital funding for major projects.

    An example of a typical IFU investment 

    IFU investment model

    *A Danish interest is defined as:

    • A Danish investor
    • A Danish company supplying goods, technology, know-how, management or services
    • Indirect financial participation in the project company
    • A Danish company sourcing products from the project company
    • A Danish participation on the board or in the management team of the project company
    • Use of state-of-the-art Danish technology in the project
    • Direct or indirect job creation in Denmark

    ADVISORY SERVICES

    With experience from close to 1200 direct investments in developing countries and emerging markets, IFU provides professional advice to Danish companies wishing to do business in Africa, Asia, Latin America and parts of Europe

    IFU offers professional advice all the way from the initial idea, through the establishment phase and until a project is economically viable.

    Our advisory services include evaluation of the business plan, financing, legal issues, negotiating with partners, access to local authorities and localization, etc. Usually, IFU is also represented on the board of the project company that is established in the investment country. Accordingly, IFU can continuously contribute with knowledge and experience regarding business operations in developing countries.

    IFU also contributes with knowledge and advice on sustainability issues and answers the questions that companies and investors are confronted with. This applies for example for questions regarding the environment, employee relations, corruption and supply chains.

    Handbooks that can guide you

    IFU has prepared a series of handbooks on business plans, board work, sustainability and financial reporting. These are available to interested companies and can be downloaded here.

    Experienced advisors in Denmark and abroad

    Advisory services are provided by IFU’s investment advisers in Copenhagen and via our regional offices in China, India, Singapore, South Africa, Kenya, Ghana, Nigeria, Ukraine and Colombia. Our Danish and local employees have extensive knowledge of such aspects as business environment, culture and language in their specific region.

    IFU’s investment advisers have years of experience in investment in developing countries, and our local employees have extensive knowledge of such aspects as business climate, culture and language in the host country.

    Additionally, IFU also has a large network of advisers in the host countries which we can refer Danish enterprises to, should they require further competent assistance.

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    Shangri-La Estate, Tanzania

    RISK CAPITAL FOR PROJECT DEVELOPMENT

    Generally, there are good business opportunities for Danish businesses in developing countries and emerging markets. However, very often interesting business ideas are not developed because projects in developing countries are associated with high risks resulting from political instability, uncertain market conditions, legislative and regulatory as well as technical challenges.

    On this background, IFU and Danida have established a project development facility of DKK 50m that can co-finance the costs of developing projects. The aim is to reduce the financial risk for Danish partners and developers who want to launch commercial projects in developing countries and emerging markets.

    DKK 5m per project

    The prerequisite for IFU’s financial participation in the development of a project is that it is estimated that it can become economically viable and bankable in the future and that IFU can expect a return. If so, IFU can contribute 50 per cent of the development costs up to a maximum of DKK 5m per project.

    Projects must also be implemented in one of the 146 investment countries that IFU can invest in and comply with IFU’s sustainability policy and general regulatory requirements.

    Project must be approved by IFU

    Project proposals are treated individually and must include a business idea, perspective and specific costs. The proposals are presented at IFU’s investment committee meetings for final approval.

    Focus on larger Danish companies

    The target group for the project development facility is large and medium-sized Danish companies. Smaller companies are referred to IFU’s SME facility.

    More information

    For further information about IFU’s project development facility, contact Investment Director Ib Albertsen.