Nefco takes on risk to accelerate the Nordic green transition

PARTNER INTERVIEW: Nefco, the Nordic Green Bank is owned by the five Nordic countries, and a partner to Sweden Sustaintech Venture Day. Where does Nefco fit into the growth financing puzzle? We asked Fredrik Larsson, Nefco’s Senior Investment Adviser in Sweden:

“Our task is to accelerate the green transition. Our position in the Nordic impact investing scene is to be a risk taker in the SMEs’ internationalization stages. The Nordic countries are small, advanced economies where a company needs to expand internationally to succeed, as the home market may be too constricting” says Fredrik Larsson.

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Nefco is there to take a higher financial risk when commercial banks or private investors cannot, and according to Fredrik is this something that is rather apparent in these times. There must be a green upside. Nefco’s green criteria are high and, in some cases, Nefco may even influence other investors to push a greener agenda. Nefco has been in the impact investing scene for over 30 years so its criteria to analyse the environmental impact may be very useful for companies as well as for the other investors. 

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Our track record includes over 600 implemented environmental projects. The task is very clear, to make the world greener. We have financing options for various growth phases depending on what stage the company is in” says Fredrik.
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Nefco offers a fast-track loan for early expansion, running up to EUR 500 000, which is very popular and appreciated.  Loans are offered on market terms, but Nefco may take on the full risk if they believe in the company. For businesses considering new market entry there is financial support for a feasibility study. For scale-up businesses Nefco offers both suitable loans and equity.

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Although risk can be high, the case must be financially and sustainably viable. What we can enable with our funds is that SMEs with a green solution may get a chance to expand even though times are tough” says Fredrik Larsson.
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When companies have been wanting to expand internationally but the credit market makes it a bit difficult, Nefco is there to play a bigger role in the market. Nefco has been a partner to Sweden Sustaintech Venture Day since the beginning, and according to Fredrik the event is an ever-important networking opportunity.

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We carefully screen and follow which green companies are in need of funding for international expansion. At the moment we are following companies within energy generation, sustainable energy, energy storage and grid solutions, in line with this year’s theme,” says Fredrik.
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E-mobility is another sector which has grown internationally during the last five years, and Nefco has financed 7 Nordic companies in this sector so far, for example Swedish Elonroad, working with connected highways. Another area is applications relating to forestry products and bioeconomy, where both Finland and Sweden are innovating at a fast pace. Water, waste management and water treatment are other traditionally Swedish skills. Of course Nefco is also present in the fast development of battery businesses in both Northern and Western Sweden.

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When entering the internationalization stage, we are working mainly with matured companies, already on their way. We do what we can to make the case succesful, this includes working closely together with other investors on the case,” says Fredrik Larsson.
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Based in Helsinki, Nefco actively seeks new investments across the Nordics. Nefco can be a financing partner from early growth until fully scaled up, usually filling a gap where the risk is too high and where private investors are reluctant.

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