The Finnish Climate Fund is a Finnish state-owned special-assignment company. Its operations focus on combating climate change, boosting low-carbon industry and promoting digitalisation.
Targets and mission
Climate change is the most pressing challenge of our time. Thus, the European Union and Finland strive to become carbon neutral in the near decades by accelerating emission reduction measures and strengthening carbon binding sinks.
The next 10-15 years in particular are critical in order to stop global warming. Ambitious climate goals necessitate substantial public and private sector investments to achieve the green and digital transitions. International and national regulations strive to make climate friendly investments more attractive. However, their full realisation takes time.
During its February 2020 climate summit, the Finnish Government announced plans to form a Climate Fund based on the Finnish State Development Company Vake. The Fund focuses on combating climate change, boosting low-carbon industry and promoting digitalisation. As a government tool, the Climate Fund contributes to boosting the necessary additional investments in order to achieve carbon neutrality.
The Climate Fund’s mission is to decrease the carbon footprint and strengthen the carbon handprint – in other words, to lower climate warming greenhouse emissions and add the emission reduction potential – by advancing new climate and digital solutions. In addition to decreasing greenhouse emissions, the fund aims to improve the use of natural resources and advance biodiversity. The Climate Fund can also fund digitalisation projects that bring societal benefits.
The Climate Fund’s mission is to decrease the carbon footprint and strengthen the carbon handprint
What does the Climate Fund invest in?
Moving to a low-carbon economy requires investments to develop for instance circular economy, clean technology solutions and energy efficiency. In addition to climate investments, the Fund can also invest in digitalisation projects bringing societal benefits, as long as they pose no harm to the environment. Approximately 65% of the Fund’s investments must relate to climate change and about 35% to digitalisation.
The Climate Fund invests in large-scale projects in which the fund’s investment is crucial to enable the project’s realisation in the first place, on a larger scale or earlier than it would with funding from elsewhere. If this kind of clear added value from the state’s participation cannot be identified from the investment, the Climate Fund will not take part in the project.
The Climate Fund’s primary investment targets are industrial scaling projects. The company can also be involved in various public platforms that improve the use of data, as well as joint ventures by private and public actors. The Climate Fund can also launch new funds or invest in funds.
The Fund can allocate debt and equity capital funding as well as mezzanine funding for private and/or public projects. The company will not award direct grants or subsidies during its launching phase. The company’s average investment ticket size is 10-50 million euros and by 2023 the Climate Fund has the possibility of using hundreds of millions of euros in its investments.
As a state-owned special-assignment company the Climate Fund aims at fulfilling its task as efficiently as possible and creating societal impact instead of maximising its own revenue. In the long term the Climate Fund’s investments and financing must, however, be self-sustainable when assessed as a whole.
Investment process and decision-making
You can use the form available on our website to provide basic information regarding an investment proposal that you hope the Climate Fund will participate in. A three-stage criteria has been created for the Climate Fund’s participation. Each investment proposal is assessed against these criteria, based on the information provided by the applicant and possible interviews.
The Climate Fund’s Board of Directors makes decisions regarding the company’s investments. The company’s operational team prepares investment proposals to the Board in collaboration with the applicant and possible external evaluators. If the company’s investment exceeds 20 million euros, the investment decision must also be supported by the Ministerial Committee on Economic Policy.
Detailed guidelines and descriptions of the Climate Fund’s investment process and decision-making are available under the heading ”Interested in funding?”.