Frequently asked questions
- What is an environmental project? How do I know that my project fulfils your criteria?
- What kind of financing can NEFCO provide?
- Can NEFCO provide grant financing?
- What conditions does NEFCO offer for its loans and/or investments?
- How do I apply for NEFCO financing?
- In which countries can NEFCO finance projects?
- How about EU sanctions and projects in Russia?
- NEFCO is owned by the Nordic countries. Do you require participation of Nordic companies etc. in your projects?
- What are NEFCO’s procurement requirements?
- What does CDM mean?
- Voluntary carbon market vs. compliance market?
1. What is an environmental project? How do I know that my project fulfils your criteria?
In order to be eligible for NEFCO financing, the project must generate favourable environmental or climate-related results that are cost effective, measurable and of interest to the Nordic countries. A typical NEFCO project can reduce harmful emissions, save energy, improve the usage of raw materials or promote recycling practices. An environmental project can also relate to environmental services or the production of energy efficient equipment and technology. Learn more about our environmental criteria here.
2. What kind of financing can NEFCO provide?
NEFCO provides risk financing in various forms such as loans, buyer credits, grants or equity-type financing. The idea is to bring additionality and enable a catalytic effect to further financing. NEFCO also offers loans on favourable terms to private and public enterprises and municipalities.
3. Can NEFCO provide grant financing?
Yes, NEFCO administers a number of grant financing schemes primarily for feasibility studies and demonstration projects, but also for public sector projects in Ukraine, Belarus, Moldova, Georgia and Armenia.
4. What conditions does NEFCO offer for its loans and/or investments?
Each financing instrument offered by or through NEFCO has specific terms and conditions. For detailed information on these conditions, please contact us.
5. How do I apply for NEFCO financing?
You can apply for NEFCO financing by sending a project enquiry that contains basic information about the purpose of the project, approximate investment costs, a financing plan and information about the applicant’s financial turnover. We recommend that you use this check list when drafting your project enquiry.
6. In which countries can NEFCO finance projects?
As regards NEFCO’s loan and equity financing, we have today a global mandate, with particular focus on Eastern Europe, that is, in Armenia, Belarus, Estonia, Georgia, Latvia, Lithuania, Moldova, Poland, Russia, and Ukraine. Our climate funds operate across the world and the Nordic Project Fund (Nopef) can provide funding for supporting the internationalisation of Nordic companies outside the EU and EFTA. See the map to find what we offer in which part of the world.
7. How about EU sanctions in Russia
NEFCO fully complies with the sanctions originally adopted in 2014 by the EU towards Russia. Our activities in Russia focus on small and medium-sized, cross-border environmental projects with people-to-people effect.
Activities that are sanctioned by the EU have not and cannot receive any financing from NEFCO, neither from NEFCO’s own equity nor from trust funds managed by NEFCO. All projects are implemented in a manner that fully comply with the sanctions.
Activities in Russia include projects financed by the Arctic Council Project Support Instrument (The Arctic Council Project Support Instrument is a voluntary, nonexclusive mechanism for financing specific priority projects approved by the Arctic Council and can use a broad range of funding arrangements including grants and revolving instruments. PSI finances primarily project preparation activities aimed at preventing and mitigating pollution in the Arctic region.PSI), a fund dedicated to pollution mitigation and prevention projects in the Arctic region. Contributors are Russia, the US, Norway, Sweden, Finland, the Sami Parliament and NEFCO. NEFCO acts as fund manager. More about PSI >>
Another is the Nordic-Russian Programme for Environment and Climate Co-operation (Programme for Environment and Climate Co-operation financed by NCM and BHSF and managed by NEFCO, provides grant financing for co-operation projects between Nordic and Northwest Russian non-commercial partners to mutually benefit the environment and climate at the regional and local levels.PECC), co-funded by NEFCO and the Nordic Council of Ministers (Nordic Council of Ministers, official inter-governmental body overseeing Nordic cooperation, based in Copenhagen, Denmark.NCM). These projects are part of cross-border cooperation between the Nordic countries and Northwest Russia. More about PECC >>
8. NEFCO is owned by the Nordic countries. Do you require participation of Nordic companies etc. in your projects?
If the project is financed through NEFCO’s Investment Fund a Nordic partner or other long term Nordic involvement is usually required for projects in the private sector. Nopef financing is available for Nordic companies or companies headquartered in some of the Nordic countries.
9. What are NEFCO’s procurement requirements?
Open and transparent procedures is required for awarding any public sector contracts for procurement of goods, works and services. They also form the basis for cost-effective use of public funds. For further information, please acquaint yourself with NEFCO’s procurement activities and guidelines here.
10. What does CDM mean?
The United Nations Framework Convention on Climate Change (United Nations Framework Convention on Climate Change with the ultimate objective – stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.UNFCCC) established the Clean Development Mechanism (Clean Development Mechanism – project based mechanism for sustainable development and emission reductions under the Kyoto ProtocolCDM) to allow emission-reduction projects in developing countries to earn certified emission reduction (Certified Emission Reductions can be generated by projects in developing countries (equivalent to one tonne of CO2) under the CDM. CERs can be used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol.CER) credits, each equivalent to one tonne of carbon dioxide. The Clean Development Mechanism – project based mechanism for sustainable development and emission reductions under the Kyoto ProtocolCDM has methodologies to produce Certified Emission Reductions can be generated by projects in developing countries (equivalent to one tonne of CO2) under the CDM. CERs can be used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol.CERs that are approved by regulators like the European Commission and can also be used for compliance with commitments made under the Kyoto Protocol, an international agreement that set binding targets for 37 developed nations to reduce their Greenhouse Gases are gaseous constituents of the atmosphere, both natural and anthropogenic that cause greenhouse effectGHGs emissions. Clean Development Mechanism – project based mechanism for sustainable development and emission reductions under the Kyoto ProtocolCDM is primarily meant to support sustainable development, approved by the host countries. Certified Emission Reductions can be generated by projects in developing countries (equivalent to one tonne of CO2) under the CDM. CERs can be used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol.CERs can be used for compliance schemes. All issued carbon credits are certified under a UN registered scheme and kept in relevant registries and transferred directly from that register to the recipient’s register. Clean Development Mechanism – project based mechanism for sustainable development and emission reductions under the Kyoto ProtocolCDM Certification schemes are designed to prevent double-counting.
11. Voluntary carbon market vs. compliance market?
Historically, the voluntary carbon market was commonly defined in contrast to the compliance market: the voluntary market, without any international oversight, consisting of privately organized carbon crediting schemes who supply mitigation units to private buyers. Corporations or individuals wanted to compensate their carbon footprint for various reasons or based on corporate social responsibility requirements.
Compliance market supply was generated by international mechanisms under the UN supervision and demand was driven by national mitigation obligations under the Kyoto Protocol and by private corporations regulated under the EU Emissions Trading Scheme.
Recently the global carbon market has seen fragmentation, and the definition of voluntary vs. compliance carbon market is no longer very clear. For example:
- Sovereign states have bought emission reduction units above and beyond their Kyoto obligations;
- Emission reduction units under the UN schemes are used for compensation
- Carbon crediting schemes are being used to disperse international climate finance
- Emission reduction units under privately organized crediting schemes may become eligible under a mandatory offset scheme (The International Civil Aviation’s upcoming mandatory scheme, CORSIA)