Finnfund, a Finnish development financier and impact investor, has established a Sustainability Bond Framework to support its goal to foster sustainable development by providing investment opportunities for private investors.
The Sustainability Bond Framework is designed to support the future issuance of green, social and/or sustainability bonds by Finnfund.
“Establishing a Sustainability Bond Framework is an important step for us. We strive to mobilise more funding for sustainable development and climate actions as well as to provide other investors an opportunity to join this work,” said Olli Sinnemaa, Chief Financial Officer at Finnfund.
“We are living in challenging times that highlights the importance of investors like us. Even if the global situation is challenging in many ways, it also creates new opportunities for investors,” he continued.
Finnfund’s mission is to generate lasting impact by investing in businesses that solve global development challenges. In its strategy, adopted in January 2022, the company sets one of its targets to fund 50% of its investments with private capital by 2030.
Mobilising private capital is key to achieving the UN Sustainable Development Goals (SDGs) in developing countries, given that the UN estimates the financing gap at USD 2.5 trillion per year.
Aligned with the ICMA principles
The Sustainability Bond Framework allows Finnfund to issue three types of bond:
1) Green bonds, to finance and/or refinance eligible green lending, equity investments, and mezzanine financing mainly targeting the objective of climate change mitigation and adaptation (Green Projects),
2) Social bonds, to finance and/or refinance eligible social lending, equity investments and mezzanine financing mainly targeting improved living and health conditions for unserved groups (Social Projects) and
3) Sustainability bonds, to finance and/or refinance a mix of Green Projects and Social Projects (Sustainable Projects).
The Sustainability Bond Framework is aligned with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines, all published by the International Capital Market Association (ICMA) in 2021.
Danske Bank acted as the adviser on the establishment of the Sustainability Bond Framework, and Sustainalytics had a role as an independent second opinion provider.
To follow the work within sustainable finance and to access the Sustainability Bond Framework and the Second Party Opinion, please visit Sustainability Bond - Finnfund
Finnfund is a Finnish development financier and impact investor. We build a sustainable future and generate lasting impact by investing in businesses that solve global development challenges. We invest 200–250 million euros in 20–30 companies in developing countries each year. Our focus sectors include renewable energy, sustainable forestry, sustainable agriculture, financial institutions, and digital infrastructure and solutions. Today Finnfund’s investments, commitments, and investment decisions total about 1.12 billion euros, half of them in Africa. The company has 90 employees. For more information, please visit www.finnfund.fi