EUR 542,1 million accumulated climate finance portfolio total financing in 2022
The Nordic Development Fund (NDF) is the joint development finance institution of the five Nordic countries. The objective of NDF's operations is to facilitate climate change investments in low-income and lower-middle-income countries for mitigation and adaptation activities. NDF finances in cooperation with bilateral and multilateral development institutions through co-financing. The operations mirror the Nordic countries’ priorities in the areas of climate change and development.
The Fund finances the Nordic Climate Facility and Energy and Environment Partnership Trust Fund (EEP Africa), which funds projects that have a potential to combat climate change and reduce poverty in low-income and lower-middle-income countries. NDF financing is provided mainly for technical assistance and for investments.
Denmark, Finland, Iceland, Norway and Sweden
NDF is a co-financing institution.
Oversight from relevant institutions and the NDF depends on where financial support is employed as per project design.
NDF is a multilateral development finance institution established by the five Nordic countries Denmark, Finland, Iceland, Norway and Sweden in 1989. The Fund’s Board of Directors makes all grant decisions, while the Control Committee oversees that the operations are conducted in accordance with the Statutes.
NDF’s Managing Director is responsible for the conduct of the day-to-day operations. NDF’s headquarters are in Helsinki, Finland, in the same building complex as the Nordic Investment Bank (NIB), the Nordic Environment Finance Corporation (NEFCO) and the Nordic Project Fund (Nopef). NIB provides support to NDF regarding office premises, staff administration, IT services, accounting and liquidity management.
Eligible areas for NDF financing include climate change mitigation and adaptation activities. As NDF is a co-financing institution, NDF financing normally constitute a part of the whole project or programme financing. The NDF-financed component of the co-financed project or programme should be in line with NDF’s mandate and eligibility criteria.
Support is provided in low-income and lower-middle-income countries which are eligible for support from IDA (less than USD 1,165 per capita income in 2016), and have previously received NDF support. Generally, both of these criteria should be fulfilled.
- Africa: Benin, Burkina Faso, Cape Verde, Ethiopia, Ghana, Kenya, Malawi, Mozambique, Rwanda, Senegal, Tanzania, Uganda, Zambia, Zimbabwe
- Asia: Bangladesh, Cambodia, Kyrgyz Republic, Lao PDR, Maldives, Mongolia, Nepal, Pakistan, Sri Lanka, Vietnam
- Latin America: Bolivia, Honduras, Nicaragua
Under certain conditions, NDF may also provide assistance to other low-income and lower middle-income countires on a case-by-case basis. Please note that although 26 countries are eligible, according to the fund's 2015 strategy, NDF intends to focus its activities on 18 countries.
Projects are normally identified by governments in partner countries according to national priorities. The NDF will also aims at obtaining project information and ideas through partnering MDBs as well as Nordic companies, organisations and networks. All financing decisions are made by NDF’s Board of Directors.
More information on NDF project identification and screening guidelines may be found in this document. All other NDF legal frameworks may be found here.
NDF will normally finance a component of a larger programme or project and the responsibility for procurement and contract negotiations rests with the national authorities. Projects have a national executing agency, and in relation to NDF, a lead agency engaged in development financing.
Co-financing for project preparatory support is also available, as explained in theNDF Strategy.
All projects are screened against core project criteria; the climate relevance and the economic viability. In addition, NDF has six strategic focal areas that guide the operations. Projects that are approved for financing, does not necessarily have to “score” highly/positively in all the focal areas. The objective is to ensure the project fits within NDF’s strategic ambition, to assess the match and facilitate systematic prioritisation in portfolio development. Furthermore, NDF has some project level aspects to be considered. All these requirements are explained in detail in the Guidelines for Project Identification and Screening.
NDF can provide financing to private sector activities in developing countries in the form of loans with equity features and equity investments. NDF will insist that any partner organisation has acceptable procurement guidelines and practices in place before approving any financing.
Find additional information on private sector procurement here.