Our added value builds on our capabilities and the areas where we can contribute the most. Our added value fills critical gaps among Nordic and international financial institutions in the climate finance field.
Interaction with the private sector and the link between private and public sector
Through our operations and a strong dialogue with our partners, we are in an optimal position to support and influence both public and private sector development, as well as activities linking the two.
We acknowledge the central role of the private sector in achieving the global climate and development goals determined in the Paris Agreement and the SDGs. An important role for us is to lead the transition of developing countries towards green, resilient and sustainable economies and societies.
Through our wide global networks, we are able to form strategic partnerships and leverage more financing and knowledge for climate change and development efforts. The combination of a co-financier with strategic partners, the smaller commitment size and different instruments enables us to provide highly additional financing.
Flexible financing and catalytic impact
The market demand for concessionary and risk-tolerant capital provides opportunities for us to distinguish ourselves. The operations with grant resources are scarce in a global context. These grants can be powerful in unlocking private sector resources and ultimately phasing out the need for public sector money.
We exercise our catalytic role through various entry points, building on the innovativeness of our approach, our role in project design, the systematic climate screening and proofing of all investments as well as efforts to promote replication and up-scaling.
Focus on adaptation
The vast majority of climate finance is targeted at mitigation, resulting in a significant lack of financing focusing on adaptation, or financing that is able to provide benefits for both challenges. Our focus on adaptation and the capacity to contribute to the climate and development agenda is highly additional. There is also a lack of actors focusing on adaptation in lower-income countries. Our activities contribute to closing this gap.
Support for early-stage design and risky stages of investments
We focus on early stages of investment. Particularly in private sector operations, we add value by mobilising co-financing from investors with higher return expectations including commercial investors.
The current portfolio includes investments where our concessionary financing has been used to leverage investments on commercial terms. In these cases, the concessionary financing mitigates return-related risks to crowd in financing.
Our Nordic identity is a valuable source of comparative advantage and it makes us an important joint Nordic vehicle for spearheading the common Nordic climate and development agenda. Through this role, we are able to support the high-level Nordic commitments to climate work on policy and operational levels.
Photo credit: Miguel Oliveira / EEP Africa