With a capital of EUR 113.4 million, NEFCO operates as a partner, lender or guarantor in economically viable projects. The projects must, however, produce relevant environmental impacts in order to merit financing. The fund finances projects in Russia, Ukraine, and Belarus as well as, for a limited period, in Estonia, Latvia and Lithuania. NEFCO gives priority to small and medium-sized projects that have positive environmental effects not only for the project country but also for the Nordic region, emphasising mainly on projects that reduce harmful discharges into waterways and seas as well as reduce crossborder airborne emissions.

The long-term participation of a Nordic partner is a prerequisite for the project to receive financing. This participation may include various forms of direct investment by a private or public enterprise. It can also be a project involving long-term deliveries. Nordic cooperation within the municipal sector, with the Investment Fund acting as financer, is also acceptable.

NEFCO requires that the projects financed by the Investment Fund should meet reasonable profitability criteria, but as long as this can be achieved, the primary focus is, however, on the positive environmental impacts. NEFCO always carefully examines the technical feasibility and financial profitability of all projects.

The Investment Fund provides capital investments or loans at market rates. Generally, the maximum investment loan per project is EUR 4-5 million. In capital investments, NEFCO's financing portion does not generally exceed 50 per cent of the total investment. Regarding share capital, the financing portion is usually around 30 per cent.  

Case study from the industrial sector

NEFCO invests in paint factory in Odessa, Ukraine. Photo: Patrik RastenbergerIn 2010 NEFCO invested in the production of environmentally friendly paint in Ukraine. NEFCO granted a loan of EUR 2.2 million from its Investment Fund for a project, aimed at establishing a paint factory which will produce waterborne paint in Odessa, southern Ukraine.

The factory is now being built by the Swedish company Eskaro and the project is valued at EUR 10.6 million. The project is also financed by Swedfund and the Eskaro Group.

The new factory will replace local production of oil based paint. Production will be based on a closed circuit, which will not cause environmentally harmful discharges into surrounding waterways.

“One of the advantages in producing waterborne paint is that one can avoid discharges of volatile organic compounds (VOCs), which are emitted from oil based paint. This project is expected to reduce discharges of VOCs by some 870 tonnes per year,” says Karl-Johan Lehtinen, Senior Manager at NEFCO’s environmental unit.

Some VOCs can cause cancer. VOCs also contribute to the creation of ground-level ozone, which in turn can harm vegetation in the ecology.

Case study from the agricultural sector

The pig farm in Kavske, Ukraine has received a loan from NEFCO's Investment Fund. Photo: Patrik RastenbergerNEFCO has provided financing for about twenty agricultural projects. One recent example is a project in Ukraine where NEFCO is cooperating with a Danish enterprise, Halychyna Zahid, which bought a Ukrainian pig farm in 2001. The farm has been modernized and refurbished, partly with financing provided by NEFCO’s Investment Fund.

The pig farm is located near Kavske village, which is about 70 kilometres Southwest of Lviv. As part of the project, NEFCO is financing improved manure treatment, which will reduce the farm's methane emissions considerably.

The project will save the farm nearly EUR 670,000 per year. The project is also having other positive impacts on the environment. The modernization of the pig farm has resulted in the removal of the old insulation material, which contained asbestos, a carcinogenic substance.

Read more about a recent loan granted from the Investment Fund

For additional information on the Investment Fund, please send an e-mail to info(at)nefco.fi or call us on +358 10 618 003