Sustainable investments for job growth and climate action: Swedfund's Annual Report 2023

Swedfund, Sweden’s development finance institution, has published its integrated annual report for 2023: Voices for Development Finance. With a growing portfolio, increased job growth and a continued focus on climate, gender equality and digitalisation, the report showcases the impact of Swedfund’s results from 2023.

Development finance contributes to a sustainable future for individuals and communities globally through investments, feasibility studies and value-creating efforts.

The fourth and final year of Swedfund's strategy for 2020-2023 was characterised by several parallel crises linked to the lingering effects of the pandemic, climate change and the consequences of Russia's full-scale invasion of Ukraine. This increases the relevance of Swedfund’s mission: to fight poverty through sustainable investments. The portfolio companies in which Swedfund has invested employ 338,000 people. In addition, Swedfund contributes to approximately 1.9 million indirect jobs. Furthermore, Swedfund's investments have increased access to energy for around 570,000 households and businesses and provided capital through around 690,000 loans to small and medium-sized enterprises.

"Taking risks is part of our mission, and Swedfund's investment rate during the strategy period 2020-2023 has been the highest ever. This has been made possible thanks to dedicated and competent employees, a business model that has been stress-tested in recent years and proven effective, and a high level of confidence from the government and parliament. This was demonstrated through an increased capital injection of SEK 1,460 million, of which SEK 460 million was earmarked for climate investments," says Maria Håkansson, CEO of Swedfund.

In 2023, Swedfund increased its presence in West Africa by establishing a new regional office in Abidjan, Côte d'Ivoire.

During the year, Swedfund focused efforts on Ukraine to support the country's recovery and reconstruction. Through an investment in the country's IT sector and cooperation with other development finance institutions, Swedfund has worked to promote employment and economic resilience in Ukraine. Swedfund also received earmarked funding for feasibility studies in Ukraine and initiated eleven feasibility studies in sustainable infrastructure during the year.

Swedfund focuses on four strategic sectors to fulfil its mission: Energy & Climate, Financial Inclusion, Sustainable Enterprises and Food Systems. Climate, gender equality and women's economic empowerment and digitalisation are three thematic areas that permeate its activities regardless of the instrument, geography or sector.

As per the owner's instructions, Swedfund invests in the least developed countries where the potential to make a significant impact is the highest. At the end of 2023, Swedfund had 73 investments in its portfolio, of which 62 percent was in countries in Africa, mainly sub-Saharan Africa.

Swedfund has adopted a new strategy for the period 2024-2030 with the aim to triple its contribution to the 2030 Agenda through sustainable investments and technical feasibility studies. By mobilising private capital and working with other actors, including Swedish companies, Swedfund aims to promote sustainable development and inclusive growth that contributes to achieving the SDGs.

Results from the year:

• 338,000 people are employed in the portfolio companies in which Swedfund has invested.
• 57 percent of investments demonstrate job growth, contributing to approximately 1.9 million indirect jobs.
• Investments contribute to 11 TWh in energy production and provide 570,000 households and businesses with access to electricity.
• Around 690,000 loans have been granted to provide capital to SMEs.
• The portfolio's value amounted to more than SEK 10 billion at the end of the year.

Swedfund reports an operating result (excluding currency effects) of SEK -16 million for the full year 2023, mainly due to write-downs in the portfolio. At the same time, dividends and net interest income have continued to develop positively, with a return (IRR) of 4.6 percent for the total portfolio.

About Swedfund's Integrated Report 2023

Swedfund's Integrated Report for 2023 summarises the company's work and performance during the year through transparent reporting and clear communication. It integrates sustainability-related information with financial information and is inspired by the International Integrated Reporting Council's (IIRC) framework.