Public Sector Investment Facility (PIF) Henna-Riikka Pihlapuro - - PowerPoint PPT Presentation

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Nov 28, 2022 107 likes •218 views

Public Sector Investment Facility (PIF) Henna-Riikka Pihlapuro Ministry for Foreign Affairs Unit for Development Finance and Private Sector Cooperation (KEO-50) Public Sector Investment Facility (PIF) Funding for developing-country public

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Public Sector Investment Facility (PIF)

Henna-Riikka Pihlapuro Ministry for Foreign Affairs Unit for Development Finance and Private Sector Cooperation (KEO-50)

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Public Sector Investment Facility (PIF)

– Funding for developing-country public investments

PIF is one of Finland’s development policy finance

instruments

PIF financing is a form of concessional investment
credit. Its purpose is to:

(i) support developing countries public sector investments aligned with UN sustainable development goals (SDGs) (ii) make use of Finnish technology and know-how

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Public Sector Investment Facility (PIF)

– Funding for developing-country public investments

Supports economically viable but commercially non-viable public sector investments in developing countries

LMICs + LDCs/LICs
Meets principles of

sustainable lending

Finnvera’s guarantee

Aim Actors

Public sector entity
Finnish enterprise
MFA
Finnvera
Financial institution

in European Economic Area

Countries Basics

Mixed export credit

instrument

Tied aid

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Public Sector Investment Facility (PIF)

– Funding for developing-country public investments

Finland’s development policy program Uses Finnish equipment, technology, expertise and services (min. 30 % Finnish content) Procurement according to legislation in developing countries Eligible for export credit Eligible for Finnvera’s guarantee

Criteria

(Commercial loan)
Interest subsidy
Guarantee subsidy (above 6 %)
Lump-sum of the investment

Grant equivalent (50 % LDCs, 35 % LICs/LMICs) Projects (subsidy) ranging between 5−30 million euros 10 % for capacity development MFA and a developing country cofinance the project

Funding

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Public Sector Investment Facility (PIF)

– Funding for developing-country public investments

Consider, as an illustrative example, an investment in a water treatment plant in a lower middle income country that costs 8.5 million euros to build with funding costs of 1.5 million euros. The Government of Finland can support the project with 3.5 million euros (35% of 10 million euros). This would be used to pay for the funding costs (1.5 million euros) and part of the investment (2 million euros). In this example the country would take a loan of 6.5 million euros at 0% interest rate to fund an 8.5 million euro investment.

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Public Sector Investment Facility (PIF)

– Funding for developing-country public investments

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Public Sector Investment Facility (PIF)

– Funding for developing-country public investments

Project concept note Deadline 5 April 2019 Feasibility Study; Due Diligence Clearance Procurement; Signing commercial contract Final grant approval (MFA) Implementation Reporting & evaluating results

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Public Sector Investment Facility (PIF)

– Funding for developing-country public investments

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Finnvera reserves the right to changes

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Public Sector Investment Facility (PIF)

– Funding for developing-country public investments

1/2017

21 21 concept papers (Vietnam 11)

(405 milj. €; MFA 152 milj. €)

4 concepts approved for further developing

(74,6 milj €; MFA 26,1 milj.€) Indonesia, Honduras, Vietnam, Kenya

2/2017

25 25 concept papers (Vietnam 4)

(463 milj. €; MFA 197 milj. €)

3 concepts approved for further developing

(68 milj. €; MFA 29,5 milj.€) Ethiopia, Nepal, Sri Lanka

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3/2018

23 23 concept papers (Vietnam 6)

(413 milj. €; MFA 162 milj.€)

4 concepts approved for further developing

( 58,2 milj. €; MFA 22,7 milj.€) Vietnam (2), Myanmar, Uzbekistan

4/2019

18 18 concept papers (Vietnam 4)

(303,7 milj. €; MFA 107,7 milj.€)

Process is still ongoing and concepts are not yet approved for further developing

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Thank You!

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Contact: Hannele Tikkanen hannele.tikkanen@formin.fi Henna-Riikka Pihlapuro henna-riikka.pihlapuro@formin.fi Please see the PIF Guidance Notes and MFA webpage for more information: https://um.fi/public-sector-investment-facility