Private and public sectors
Through our operations, we are in an optimal position to support both public and private sector development, as well as activities linking the two sectors. We engage in both the public and the private sector, and use financial instruments flexibly, alone or in various combinations, to match the financial needs of projects.
Through our financing, we provide different kinds of solutions for the financing of nationally prioritised public sector projects implemented by public sector entities, especially the multilateral development banks in the focus countries. We co-finance projects in the public sector through grants and concessionary loans with the goal of validating the project's concept and leveraging financing from other sources. In addition, we identify financing opportunities and act as a matchmaker between the public and private sectors to help raise capital for demonstrably viable and scalable initiatives.
Our approach to private sector operations recognises the central role of private sector actors and stakeholders in achieving the global climate and development goals determined in the Paris Agreement and the Sustainable Development Goals. This approach highlights the private sector as an essential source of innovation, cutting-edge solutions, efficient interventions and market development. In this context, a guiding principle is that private sector companies, such as technology providers and project developers, play an important role in leading the transition of developing countries towards green, resilient and sustainable economies and societies. Moreover, by supporting initiatives and partnerships between the public and private sector, we strengthen these transformational processes.
The Climate Resilience and Adaptation Finance and Technology Transfer Facility (CRAFT) is the first commercial investment vehicle dedicated to expanding globally the availability of technologies and solutions for climate change adaptation and climate resilience. CRAFT is a private equity fund with a blended structure and it makes growth equity investments in selected private companies with climate resilience solutions to address the impacts and risks being increased by climate change. Photo: NDF
We have been in the forefront of developing adaptation finance led by the private sector where strategic transformations of business models and production processes can provide adaptation and resilience solutions, as well as mitigation and adaptation co-benefits.
In private sector operations, we focus on early-stage project financing, which is usually associated with the highest risk levels during the lifecycle of projects. For example, the Environment and Energy Partnership (EEP) and the Nordic Climate Facility (NCF), two financing facilities managed by NDF, have provided catalytic and early-stage financing to a significant number of companies with green and climate-relevant technologies and solutions in developing countries.
We add value to investments by mobilising co-financing from investors with higher return expectations and lower risk appetites, including commercial and institutional investors. Our catalytic impact is also relevant to publicly funded DFIs, both multilateral and bilateral, including the Nordic DFIs.
Public sector financing
Through its financing, NDF provides different kinds of solutions for the financing of nationally prioritised public sector projects implemented by public sector entities in the focus countries.
Private sector financing
Recognising the central role of the private sector in climate finance, NDF seeks ways to partner with the private sector to mobilise commercial and institutional investors to finance climate action, and to support local private entities in developing countries.
Photo credit: Fedearroz