The Finnish DFI said the multi-tranche issuance attracted international institutional investors from Asia and Europe.
Finnfund, Finland’s development finance institution (DFI), said it had completed a multi-tranche green and sustainable bond issuance totalling almost €200m, attracting investment from pension funds and insurance companies.
This is Finnfund’s first multi tranche issuance and includes the longest ever maturity bond issued under the DFI’s Sustainability Bond Framework, set up in 2022.
Included are a $50m (€44m) green bond due 2035 with a 4.75% coupon, a €28m million sustainable bond due 2032 with a 3% coupon, a €60m sustainable bond due 2040 with a 3.5% coupon, and a €65m sustainable bond due 2055 with a 3,6% coupon. The German subsidiary of financial group Jefferies acted as arranger and lead manager for the bond issuance.
Investors in all the tranches are international institutions from Asia and Europe, including pension funds and insurance companies. Their interest reflected strong interest in the Finnish DFI and the commitment of credit investors to supporting impact investing, according to Olli Sinnemaa, Finnfund’s chief financial officer.
“We are proud of Finnfund’s ability to acquire funds in different currencies and ultra-long maturities from the markets. Pricing was close to sovereign levels, again demonstrating Finnfund’s reputation as a sustainable investor,” he said.
Proceeds from the issuance will be used in accordance with the green and social project categories of the DFI’s Sustainability Bond Framework. These provide finance or refinance eligible green and social lending, equity investments, and mezzanine financing for climate change mitigation and improving the living conditions and health of unserved groups. Proceeds will be allocated to eligible projects to mobilise debt capital.
Private investment opportunities
“In addition, it contributes to Finnfund’s goal to foster sustainable development by providing investment opportunities for private investors,” Sinnemaa said. The DFI has set a goal of increasing the proportion of private capital in its financing to at least 50% by 2030.
Finnfund invests €200–250m in 20–30 companies in developing countries each year, focusing on sectors including renewable energy, sustainable forestry, sustainable agriculture, financial institutions, and digital infrastructure and solutions. The DFI’s investments, commitments, and investment decisions currently total some €1.22bn with around half of that in Africa.
In an interview with Impact Investor, published in early May, Heikki Cantell, Finnfund’s new board chair discussed plans to prioritise Finnfund’s role as a technology-driven impact investor, while making climate action and environmental issues central pillars of its strategy.
Reflecting the tech focus, in January, Finnfund participated alongside Google and the US International Development Finance Corporation in a $90m equity investment round for Cassava Technologies, a pan-African technology company.
Other recent investments include a loan, alongside Swedfund, to Nepal’s Siddhartha Bank to boost financial inclusion in the under-developed Himalayan kingdom. More recently, it made a small investment in Mountain Hazelnuts, a sustainable agroforestry social enterprise operating in nearby Bhutan.
