IFU - Investeringsfonden for Udviklingslande

Supporting the Sustainability Development Goals

Poverty reduction and Climate action are at the centre of DSIF’s mission to promote investments in infrastructure which support sustainable development in developing countries and realisation of the SDGs.

Value and impact are created by providing access to concessional finance that will de-risk investments and ease terms of repayments for governments leading to the construction of infrastructure otherwise in risk of not materialising due to limited public budgets or lack of commercial finance.

The infrastructure projects are demand-driven and made in close cooperation with governments and other development partners to ensure that they address local development needs and are long term cost effective as well as environmentally sustainable.

By leveraging Danish green technology, knowhow and other sustainable solutions, DSIF assist in promoting climate smart and best in class technology solutions.

Moreover, across projects there is a strategic focus on creating decent jobs, gender equality, as well as supporting youth employment and the green transition. See DSIF Strategy (DSIF’s mission and value proposition) for more detail

Providing concessional finance for infrastructure projects

DSIF supports infrastructure delivery through the entire project lifecycle – from initial project definition, through construction, to final take-over of assets and commencement of operations. A strong emphasis on development impact objectives is maintained throughout implementation and results are monitored until five years after handover.

What we offer

• DSIF financing to projects in the form of concessional debt, including coverage of interest and other financing costs and provision of grant funding where applicable.
• DSIF financing and support to:

• • Project Preparation through technical feasibility assessments and other preliminary design documentation, with a strong focus on environmental sustainability and long-term cost efficiency.
  • Procurement and Contracting of Works through associated technical assistance, design and supervision contracts, including for large and complex projects.
  • O&M Support through technical assistance and capacity development support, often including elements of twinning with Danish utilities.

A strong sector focus
DSIF is focused within three main sectors of core Danish competence that are essential to achieving sustainable development and improving the livelihoods of people while protecting the planet.

Operating in low- and lower-middle income countries
DSIF operates in low-income and lower middle-income countries as defined by GNI per capita (below USD 4,095 in 2023) with a Danish representation. Africa is a priority region and expected to maintain a two-thirds share of total DSIF engagement. DSIF adopts a differentiated approach to each country group depending on specific needs, level of poverty, and wider Danish development cooperation efforts. See DSIF Strategy (DSIF’s mission and value proposition) for more detail.

Project development

The massive infrastructure investment needed to drive inclusive growth and reduce poverty in the countries where DSIF operates is hampered by challenges including low capital availability and high perceived risk – especially at the earliest stages of the infrastructure project lifecycle. Often, available capital is not utilised due to a lack of bankable projects.

Moreover, ensuring inclusive social and economic development is not only a matter of just closing the “financing gap” but also a question of how governments prioritise using financing to bring about sustainable solutions.

DSIF project development related activities, including feasibility assessments, project design, and upstream technical and legal assistance to local partners serve to de-risk and mobilise financing to projects at a critical stage in the investment cycle, while embedding long-term cost effectiveness and environmental sustainability right from the onset.

Official requests for support must come from the public authorities in host countries. However, private companies may also present proposals to the DSIF team for initial discussions on eligibility.

Key information required in DSIF’s initial assessment of project eligibility includes:

• Project background
• Poverty reduction and climate action objectives
• Total project investment incl. detailed budget
• Type of equipment to be delivered
• Contract amount to be financed
• Financial set-up including borrower and guarantor (confirmed by a letter of intent)
• Organisational set-up
• Timetable and milestones in the project
• Requirements for support

All projects must be tendered. As a point of departure, the tender will be limited to Danish suppliers, but where there is a lack of Danish tenderers international bidding may be chosen.

IFC Performance Standards on Environmental and Social Sustainability and UN Guiding Principles on Business and Human Rights are applied in all DSIF-supported projects.

Reference documents

Rules and guidelines

• Guiding principles for Danida Sustainable Infrastructure Finance
• DSIF rules for procurement

OECD documents

• Ex Ante Guidance for Tied Aid
• Arrangement on Officially Supported Export Credits

Announcement

Invitation for Prequlification, Dhaka Water Supply and Sewerage Authority, Saidabad Water Treatment Plant Project Component 2: Water Treatment Plant and Sludge Treatment Plant