Maria Håkansson: “we need much greater coordination to mobilize private finance for countries in Africa”

Feb 26, 2019 | Agence Ecofin

Although little known to African public opinion, Swedfund, the Swedish government's main development finance institution, concentrates a very important part of its efforts on the continent. At the beginning of this year, the Chief Executive Officer agreed to share with Ecofin Agency the evolution and prospects of her institution, related to the African’s private equity landscape.

Ecofin Agency (EA): Swedfund is a major player in African Private Equity and the region accounts for 62.4% of your commitments. How can we explain this choice that is focused on a continent which often faces many challenges?
Maria Håkansson: Swedfund is the Swedish state's development financier and we have long experience of making investments in difficult and challenging markets. Our mission is to fight poverty by investing in sustainable businesses. We select the markets where the need is greatest and we can have the biggest impact. As a development financier, we ourselves or together with other actors enter these markets and through entrepreneurship and job creation we help people to improve their living conditions. We call it impact investing.
EA: You are currently implementing your 2030 agenda. What has been Africa's share in 2018, as we recall that you received fewer resources in 2018 (600 million Swedish kronor, or $66.42 million)?
Maria Håkansson: We are financed through annual capital injections from the development cooperation budget and financial revenues from our portfolio. In 2018, our capital injection was increased from 400 to 600 million Swedish kronor and we invested approximately 1.2 billion Swedish Kronor of which 61.6 % was invested in Africa.
EA: You plan to increase your annual commitments in Africa to 60-80% and three sectors are targeted, namely: Renewable energies, health, and small and medium enterprises. These are fairly complex areas and where profitability is progressive. Why do you risk it anyway?
Maria Håkansson: Our role as a development finance institution includes being additional, meaning that we finance projects that would not be realized with only commercial financing. We selected sectors and markets where we see the need is the greatest and where we see that we can contribute. Based on our 40 years of experience we have developed a business model that identifies and focuses on risk management – still, risks are very high and part of our mission. Through our business model based on impact on society, sustainability and financial viability, we contribute to the implementation of Agenda 2030 with leverage. Read the full interview from Ecofin Agency.