Navigating a challenging time: Nefco’s annual results 2023 reflect robust performance and commitment to green financing

Nefco, the Nordic Green Bank tasked with accelerating the green transition, has published its Annual Report for 2023. Nefco is owned by the five Nordic countries and plays a key role in implementing the Nordic Vision 2030, which aims to make the region the most sustainable and integrated in the world.

The profit for the 2023 financial year was EUR 10.8 million (2022: EUR -53.3m), a significant turnaround from 2022 when Nefco had to ensure substantial loss provisions for Eastern Europe due to the full-scale war launched by Russia. In 2023, Nefco received significant earnings from interest from its Nordic SME business and recorded substantial earnings from Eastern Europe, mainly Ukraine, due to interest received and repayments from previously impaired loans. Nefco’s trust fund management activities related to clean off-grid energy, clean cooking and Baltic Sea environment also delivered positive results.

At the end of 2023, Nefco had a total of 324 active projects in its portfolio. Of these, 83 were investments from its own capital, mainly in the form of loans, representing a total of EUR 205.2 million in committed funds. The remaining 241 were trust fund projects, representing EUR 206.8 million in committed funds.

Climate change mitigation and adaptation, pollution reduction and biodiversity are the cornerstones of Nefco’s financing. Investments and projects are diversified across a wide range of sectors, but the emphasis continues to be on solutions in the energy, construction and real estate, water supply and waste management, manufacturing and transport sectors, with climate change mitigation as the main driver. There has also been an increase in investments for solutions related to sustainable use and protection of water and marine resources, as well as pollution prevention and control.

An assessment of Nefco’s investments as of 2022, using the objectives defined before November 2023 (Climate Change Mitigation and Adaptation), shows that more than 70% of the investment portfolio is EU Taxonomy eligible.

Trond Moe, Managing Director of Nefco, sees the key role that innovation-driven Nordic small and medium-sized companies (SMEs) play in the economy and the green transition. However, they often face challenges when seeking debt financing from traditional commercial banks. 

“We aim to fill the so-called ‘missing middle’ – that is, to provide financing that supports these companies in their early growth phase and helps them attract other investors and private sector financing. In particular, our financing seeks to demonstrate the scale-up potential of green solutions in new markets.” 

One of Nefco’s strategic goals is to contribute to the growth, competitiveness and green transition of Nordic SMEs. During 2023, eight new Nordic SME scale-up investments, with a total value of EUR 20.8 million, and four fast-track loans with a total value of EUR 1.8 million, were agreed.

Concrete actions for biodiversity and Ukraine’s recovery

Nefco’s Biodiversity Pilot Programme for Nordic SMEs, which aims to inspire companies and project owners to think in terms of nature-positive measures, a top priority for the Nordic countries, proceeded with six pioneering pilot projects all of which showcase diverse approaches to biodiversity.

In Eastern Europe, the main focus has been on the Nefco Green Recovery Programme for Ukraine. The multi-donor programme had attracted EUR 290 million in trust fund investments from the European Union and Nordic governments by the end of 2023, and 40 recovery projects were being implemented, with several new ones in the pipeline.

“In Ukraine, Nefco is partnering with municipalities and local authorities to address both the direct and indirect consequences of the war and help Ukraine build back greener and better. There’s been a high level of activity on the ground in Ukraine throughout 2023, with over 40 recovery projects ongoing at the end of the year. The ultimate goal is to strengthen the resilience of the Ukrainian people and promote sustainable development and the further integration of Ukraine with Europe,” Moe continues.

Taking a lead in the green transition

The Nordic region shares a common ambition to be a global frontrunner in the green transition and sustainability and to increase the competitiveness of Nordic businesses, promote action on biodiversity and contribute to the Sustainable Development Goals (SDGs). 

“The Nordic region is one of the wealthiest, most stable and most democratic parts of the world. As such, we have not only an opportunity but also a responsibility to take a lead in the green transition,” Moe concludes. 

More information in the Nefco Annual Report 2023.

Nefco is an international financial institution (IFI) founded in 1990 by the five Nordic countries, Denmark, Finland, Iceland, Norway and Sweden. Nefco’s task is to accelerate the green transition by financing the initial scale-up of Nordic green solutions globally. Nefco’s investments encompass a wide scope, from renewable energy and circular economy to pollution prevention and protection of biodiversity. By providing debt financing when commercial banks cannot accept the risk, Nefco fills a critical financing gap and helps companies grow faster than they otherwise would. One of its key objectives is to make green projects and companies bankable, mobilising other investors and private sector financiers.

Therefore, Nefco plays a key role in implementing the Nordic Vision 2030 to make the region the most sustainable and integrated in the world. More information on www.nefco.int.  

For further information, please contact:

Trond Moe, Managing Director, Nefco
trond.moe@nefco.int, +358 50 329 0860

Josefin Hoviniemi, Vice President Communications, Nefco
josefin.hoviniemi@nefco.int, +358 50 464 6995


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