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Swedfund invests where impact matters most

2024 was another year marked by new conflicts and war, heightened geopolitical tensions, macroeconomic instability and climate change, while poverty fell to pre-pandemic levels.

The world will continue to face major challenges in 2025. Swedfund, Sweden’s development finance institution and part of Sweden’s development cooperation, strives to overcome these challenges through sustainable investments.

We are witnessing a world in constant flux, with reprecussions that are difficult to predict. The increasing level of uncertainty has led to a higher level of risk in Swedfund’s portfolio.

Today, around 700 million people in the world live in extreme poverty earning less than USD 2.15 per day. Poverty is not just about a lack of income. It is also about not having access to essential goods and services, such as food, electricity, sustainable infrastructure or digital services, important components in the development of inclusive and sustainable communities. Stronger growth, functioning economies and reduced poverty levels require greater investment by development finance institutions such as Swedfund and other private and institutional actors.

What we see when we visit the countries and regions we invest in is that demand for investment is high and the opportunities are many. Africa has the fastest growing population and a high proportion of young people. Economic growth is predicted to be rapid even though it has slowed since the pandemic. The African Development Bank expects growth of 4.3 percent for Africa’s economy in 2025, with the forecast for East Africa being particularly good. We are monitoring developments and the risks posed by the ongoing conflicts between the Democratic Republic of Congo and Rwanda for the entire region.

Swedfund’s strategy for the period 2024-2030 addresses several of the needs in developing countries. Our aim is to triple our development impact by investing in the private sector and conducting feasibility studies in public infrastructure. In geographical terms, we continue to prioritise investments and projects in sub-Saharan Africa, South and South East Asia and Ukraine. One year into the strategy, we can see that we are well on track towards achieving our aim. The value of Swedfund’s contracted portfolio was SEK 13 billion at the end of the year, which represents an increase of SEK 3 billion in 2024. The increase can be explained mainly by the 15 investments contracted during the year and the positive effects from currency conversion.

For 2024, Swedfund received a capital injection of SEK 1,460 billion from the Swedish Parliament. SEK 460 million of this amount is earmarked for climate investments. Returns from the portfolio and capital injections from the development cooperation budget have together enabled investment of just over SEK 2.7 billion in Energy & Climate, Financial Inclusion, Sustainable Enterprises and Food Systems. During the year, we also utilised guarantees from the EU to enable investments associated with major financial risks.

In 2024, we also scaled up our regional office for West Africa located in Abidjan, Côte d’Ivoire. This is an important complement to the office in Nairobi which covers East Africa. The regional offices fulfil a vital role in our work to identify new investments and contribute to sustainable value creation.

In the Spring Budget, we received an additional capital injection of MSEK 300 for investment in Ukraine, and in June, we decided to open a local office in Kyiv to enable a higher volume of investment and feasibility studies. The Project Accelerator, which carries out technical feasibility studies in the public sector, received MSEK 90 earmarked for Ukraine, and MSEK 15 earmarked for Moldova. This means that we now have 25 ongoing projects within critical infrastructure, such as electricity, water and wastewater solutions, as well as digitalisation. Some of these are currently under way, such as the study that mapped how a functioning 112 system could be implemented, which the European Investment Bank (EIB) has decided to fund.

Swedfund mainly achieves the mission objectives stated in our public policy assignment regarding women’s economic empowerment, jobs in line with the ILO Declaration on Fundamental Principles and Rights at Work, climate, capital mobilisation and profitability of the portfolio companies. Operating profit (EBIT) amounted to MSEK 304 in Q4 and MSEK 376 for the full year 2024. The positive result was mainly due to effects from currency conversion during Q4 and strong capital gains from partial divestments in the fund portfolio.

Given the positive EBIT for 2024, Swedfund has met its financial objective to have a positive operating result measured over a rolling fiveyear period. EBIT excluding exchange rate effects was MSEK 28 in Q4 and MSEK 69 for the full year 2024. The return on the portfolio expressed through IRR also developed positively in 2024 standing at 5.6 percent at the end of the year consolidated for the total portfolio, compared with 4.6 percent at the start of the year.

For 2025, the Swedish parliament has decided to allocate a capital injection of MSEK 1,800 to Swedfund, of which a maximum of MSEK 500 may be used for investments in Ukraine, and MSEK 600 is earmarked for climate investments. The Project Accelerator received MSEK 280, of which MSEK 110 is earmarked for investments in Ukraine and the local area. We see this as great recognition of our work to create jobs and reduce poverty, our work in Ukraine, and in terms of climate which also reflects the demand for investments in a green transition that we see on a global scale.

I would like to extend a big thank you to all employees for their efforts during the past year and for everyone’s commitment to our mission. Our role is clear: to invest with impact as a guiding principle to reduce poverty and create sustainable growth in the world’s most vulnerable regions.

Our business model demonstrates that sustainable investments with good returns are possible even in complex regions. The conditions necessary to include commercial capital are present in many of our investments. We can create additional conditions for this through different structures for risk diversification and instruments such as guarantees.

From solar energy to loans to female entrepreneurs in Africa - to reconstructing Ukraine’s infrastructure in the midst of a war - Swedfund’s investments drive sustainable development and guide the way.


Maria Håkansson,
Chief Executive Officer