In a time of increased need - Swedfund's model delivers sustainable results

In the context of wars and conflicts, heightened geopolitical tensions and macroeconomic turmoil, the need for development finance has increased. In 2024, Swedfund accelerated sustainable investments for climate action and poverty reduction to a total value of SEK 2.7 billion while also delivering a positive financial result. Ukraine was prioritised, resulting in 25 new projects within critical infrastructure. On Monday, Swedfund published its Integrated Annual and Sustainability Report for 2024 - Investing for Employment, Environment, Empowerment.

During 2024, Swedfund made 15 new investments, and the total portfolio value amounted to SEK 13 billion, an increase of SEK three billion compared to 2023. The number of jobs in the portfolio increased and almost half of the portfolio companies were able to employ more people. Greenhouse gas emissions per invested SEK also decreased by 16 percent.

The Swedish Parliament approved a capital injection of SEK 1,460 million to Swedfund for 2024, of which SEK 460 million was earmarked for climate investments. Together, reflows from the portfolio and capital injections from the International Development Cooperation budget enabled an investment volume of just over SEK 2.7 billion in the sectors Energy & Climate, Financial Inclusion, Sustainable Enterprises and Food Systems.

— We recognise that our investments make a difference to those who need it the most. Besides lacking an income, many people living in poverty do not have access to essential goods and services such as food, electricity, sustainable infrastructure or digital services. Increased growth, sustainable societies and reduced poverty require increased investment by development finance institutions such as Swedfund and other actors, says Swedfund's CEO Maria Håkansson.

The Government allocated an additional SEK 300 million for investments in Ukraine in the Spring Amending Budget, and in June Swedfund announced a decision to open an office in Kiev to enable an increased investment volume and further feasibility studies.

— The needs in Ukraine are great and the conditions are challenging. Investing for job creation and the country's reconstruction, as well as helping to put critical infrastructure in place through technical feasibility studies, will continue to be crucial in 2025, says Maria Håkansson.

According to Swedfund’s public policy assignment, all portfolio companies must comply with the ILO Core Conventions for decent working conditions no later than three years after investment, and at least 60 percent of the companies must adhere to the 2X Criteria for women's economic empowerment. For 2023, the results were 97 and 66 percent respectively.

Operating profit (EBIT) totalled SEK 304 million in the fourth quarter and SEK 376 million for the full year 2024. The positive result was mainly from the effects of currency translation in the fourth quarter and a strong capital gain from partial divestments in indirect investments. With a positive EBIT for 2024, Swedfund is meeting its financial target of a positive operating profit measured over a rolling five-year period.

The investment portfolio's return expressed in IRR also developed positively in 2024 and ended up at 5.6 percent for the total portfolio, compared to 4.6 percent at the beginning of the year.

— Swedfund's results show a well-performing and stress-tested business model that delivers in line with both mission objectives and financial targets. By combining impact, sustainability and financial viability, Swedfund continues to create long-term value in challenging contexts, concludes Maria Håkansson.

Read Swedfund's integrated Annual and Sustainability Report