The nature of Finland’s development cooperation financing has undergone a drastic change in the current government term. On average, cuts of approximately 40% were made in different forms of financing granted as donations, including Finland’s bilateral and multilateral cooperation and NGOs. The only area not affected by the cuts is Finland’s cooperation channelled through the EU, which has even increased in relative terms as a result of the cuts. At the same time, the government made a decision on a three-fold increase in the amount of financing provided as loans and capital, or so-called financial investments. This was the greatest single sea change of all times in Finland’s development policy financing.
The share of loan and capital investments is EUR 130 million this year, and similar amounts will also be invested in 2018–2019. Last year, the government granted EUR 130 to Finnfund as a financial investment, and EUR 10 million to finance company ICC, which operates under the Inter-American Development Bank, for a capital increase. In total, this amounts to EUR 530 over the entire government term.
“Considering the objectives of development policy, this sum is a significant resource which must be allocated judiciously, and its development impacts must be closely monitored. A precondition for this is more open exchanges of information and drawing on various stakeholders’ competence already in the planning phase of financial investments”, says Aila Paloniemi, Chairperson of the Development Policy Committee (Centre Party).
Read the whole press release (pdf): Development Policy Committee calls for transparency in the allocation and use of financial investments