What happened
The Finnish Government has proposed a new act on development policy investments to create a clear legislative foundation for the country's development policy investments.
The proposal aims to define the objectives, principles, and procedures of development policy investments, which have been part of Finland's development cooperation since 2017.
According to Minister for Foreign Trade and Development Ville Tavio, the financing required to achieve sustainable development exceeds public funds, and private capital is needed to finance investments, business activity, and job creation in developing countries.
The proposed act would promote the use of development policy investments as an instrument of Finland's foreign and development policy, increase transparency and predictability, and prevent distortions of competition.
The Ministry for Foreign Affairs could make development policy investments in funds that promote sustainable development, and investments could be made with private investors on the same or different terms.
The reform may create opportunities for Finnish fund managers to establish funds focused on emerging markets and open up new business and investment opportunities for Finnish companies.
Since 2017, Finland has made development policy investments worth approximately EUR 312 million, which have supported climate action, digital infrastructure, business financing, and agricultural development in developing countries, and have helped mobilise approximately EUR 1.6 billion in private funding.
