Investments during the year

Since our inception, we have invested in companies, financial institutions and funds in countries across Africa, Asia, Latin America and Eastern Europe. During 2023 Swedfund made 14 new investments within the Energy & Climate, Financial Inclusion and Sustainable Enterprises sectors, At the end of 2023, Swedfund had 73 investments in total.

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Portföljbolagens verksamhetsländer och det är där våra investeringar skapar utvecklingsresultat. Vårt arbete tar avstamp i vår förändringsteori (Theory of Change). Det innebär att vi gör en analys av hur en potentiell investering kan bidra till förändring samt vilka direkta och indirekta

Case

Husk Power Systems
Type: Equity (direct)
Country/region: India, Nigeria
Sector: Energy & Climate
Amount: MUSD 5

In Nigeria, almost half of the population lacks access to electricity, while India is approaching 100 percent electrification but with electricity of varying quality and reliability.

Swedfund has invested an additional USD five million through equity in the existing portfolio company Husk Power Systems (Husk). Husk designs, builds, owns and operates solar-based microgrids in India and Nigeria. This additional investment will be used for the continued deployment of microgrids that enable increased access to clean, affordable and reliable energy in rural and semi-urban areas. We have been shareholders in Husk since 2017.

Vietnam Prosperity Joint Stock Commercial Bank
Type: Loan (direct)
Country/region: Vietnam
Sector: Financial Inclusion
Amount: MUSD 25

Vietnam has successfully reduced poverty for several years. According to the United Nations Development Programme (UNDP), the main reason is that Vietnam has prioritised investments for increased productivity and job creation in a range of sectors and industries. Vietnam is one of Southeast Asia’s fastest-growing economies with a clear ambition to develop its private sector sustainably. It is therefore important that the country’s financial sector is strengthened and that companies are given the opportunity to grow.

Small and medium-sized enterprises in Vietnam account for 98 percent of all enterprises and 40 percent of the country’s GDP. Swedfund’s loan to Vietnam Prosperity Joint Stock Commercial Bank provides the bank with complementary long-term financing, which is expected to support private sector growth, especially for small and medium-sized enterprises. The loan is part of a syndicate with other development finance institutions led by the International Finance Corporation (IFC) and is our first direct investment in Vietnam’s financial sector.

Horizon Capital Growth Fund IV
Type: Equity (indirect)
Country/region: Ukraine, Moldova
Sector: Sustainable Enterprises
Amount: MUSD 15

Russia’s full-scale invasion of Ukraine has had a major impact on the Ukrainian economy and has limited access to capital for businesses and others. However, companies in Ukraine’s IT sector have quickly adapted to the new circumstances. The sector expanded by six percent in 2022 to over USD 7.3 billion in service exports and it paid over USD 1.5 billion in taxes and duties. These companies continue to create jobs, especially for the young population in Ukraine and Moldova.

Swedfund has agreed on an indirect equity investment of up to USD 15 million in Horizon Capital Growth Fund IV. Horizon Capital is a leading firm in Ukraine and the manager’s fund IV is targeting investments in the IT sector in Ukraine and Moldova. The fund is expected to contribute to the creation of more jobs and export revenues for both countries as well as the continued development of the private sector in Ukraine and Moldova.

E3 Low Carbon Economy Fund I
Type: Equity (indirect)
Country/region: Sub-Saharan Africa
Sector: Energy & Climate
Amount: MUSD 10

Enabling early-stage companies to grow and develop their business in areas such as renewable energy and digitalisation contributes to economic growth and job creation. Given this context, we made an indirect equity investment of USD ten million through E3 Low Carbon Economy Fund I (E3). E3 is focused on investments in renewable energy, climate and digitalisation in developing countries in sub-Saharan Africa. Kenya, South Africa, Ghana and Nigeria are examples of countries in which investments will be made.

The fund’s strategy is to primarily invest small amounts in relatively new companies in three areas: off-grid renewable energy solutions; digital products and services; and low-carbon products and services that may include electric vehicles.

Transform Health Fund
Type: Equity (indirect)
Country/region: Sub-Saharan Africa
Sector: Sustainable Enterprises
Amount: MUSD 5

The healthcare systems in many African countries are not sufficiently robust or developed to meet the extensive needs that exist. According to the WHO, a combination of measures from public and private actors is necessary to establish a functioning health sector in these countries.

Swedfund has agreed on an indirect loan investment in the health sector through Transform Health Fund, which geographically prioritises investments in sub-Saharan Africa. The fund will provide debt financing to small and medium-sized enterprises to develop innovative healthcare models and digital solutions that contribute to a more resilient healthcare ecosystem in Africa.

Amethis Fund III
Type: Equity (indirect)
Country/region: Africa
Sector: Sustainable Enterprises
Amount: MUSD 20

A majority of Africa’s young population lacks stable economic conditions. About a third of Africa’s 420 million young people aged 15-35 are unemployed. Nine out of ten jobs are created in the private sector and investments are required for companies to grow and employ more people.

Swedfund made an indirect equity investment in Amethis Fund III, a generalist fund focused on several industries, mainly in consumer products and services. The fund’s geographic focus is all of Africa, with East Africa and West Africa expected to account for the largest share of investments. In addition to job creation, Swedfund’s investment in Amethis will contribute to the mobilisation of private and institutional capital.

A man and a boy on a bicycle on a street in India

South Asia Growth Fund III
Type: Equity (indirect)
Country/region: India, Southeast Asia
Sector: Energy & Climate
Amount: MUSD 25

In India and countries in Southeast Asia, many sectors show good growth potential, and in many cases, this is combined with a growing population. To facilitate green growth and reduce dependence on fossil fuels, investments in green solutions that lead to reduced carbon dioxide emissions and climate impact are required.

Swedfund has agreed on an indirect equity investment in South Asia Growth Fund III. The fund has a broad mandate to invest in various sectors where the focus is on climate benefits and resource efficiency in the agricultural sector and other sectors that include energy efficiency, mobile and digital solutions, recycling, water and sanitation.

Mirova Gigaton Fund
Type: Loan (indirect)
Country/region: Sub-Saharan Africa, Southeast Asia, Latin America
Sector: Energy & Climate
Amount: MUSD 30

Huge solar cell park in front of a blue sky

Increased access to affordable, reliable and sustainable energy is crucial to achieving the Sustainable Development Goals. Today, about 760 million people lack access to electricity, which negatively affects countries’ development and economic growth. According to the International Energy Agency, investments in renewable energy equivalent to USD 660-730 billion are needed to achieve the Sustainable Development Goals. This involves replacing fossil energy with renewable energy sources and increasing capacity to meet increased energy needs globally.

Our investment in Mirova Gigaton Fund aims to increase access to off-grid solar energy solutions. The investment enables debt financing of companies developing such solutions. The fund has a broad geographical mandate, but primarily targets countries in sub-Saharan Africa, Southeast Asia and to a lesser extent Latin America. We are helping to strengthen the fund’s sustainability efforts in areas such as environmental and social issues and women’s economic empowerment.

Apis Growth Markets Fund III
Type: Equity (indirect)
Country/region: Africa, South Asia, Southeast Asia
Sector: Sustainable Enterprises
Amount: MUSD 32

An obstacle to development and sustainable growth is the lack of well-functioning financial services such as savings, payment solutions or similar in developing countries. Swedfund has made an indirect equity investment in Apis Growth Market Fund III (Apis III), a fund that targets companies at the intersection of finance and technology in Asia and Africa. Apis III focuses primarily on companies in Egypt, India, Indonesia, Kenya and Nigeria.

Our investment is expected to contribute to increased digitalisation and innovation, improved access to and quality of financial services and the creation of jobs with decent working conditions. We have invested in two previous funds with the same fund manager and the investment in Apis III alongside other development finance institutions has enabled significant mobilisation of private capital. Our investment also contributes to the development of Apis’s work with women’s economic empowerment.

African Rivers Fund IV
Type: Loan (indirect)
Country/region: Sub-Saharan Africa
Sector: Financial Inclusion
Amount: MUSD 15

Increased access to long-term financing and value creation for small and medium-sized enterprises, as well as increased employment, income and women’s economic empowerment, contribute to sustainable private sector development in Africa.

We agreed on an indirect loan investment through a commitment of up to USD 15 million in African Rivers Fund IV (ARF IV). Swedfund has invested as a shareholder in the manager’s previous fund, African Rivers Fund III, and the investment in ARF IV expands its involvement in countries such as the Democratic Republic of Congo, Uganda, Angola and Zambia. ARF IV is a credit fund with a broad and general focus on several industries. The fund helps to increase access to finance for small and medium-sized enterprises in challenging markets where there is a high demand for growth capital.

A man and a woman talking in front of a colorful store

Joliba Capital Fund I
Type: Equity (indirect)
Country/region: Africa
Sector: Sustainable Enterprises
Amount: MEUR 15

Enabling small and medium-sized enterprises in the least developed regions of francophone Africa to grow is essential to contribute to private sector growth, tax revenues, job creation and women’s economic empowerment.

Swedfund has agreed to make an indirect equity investment in Joliba Capital Fund I. The fund is primarily focused on consumer sectors including financial services, consumer goods, insurance and education. The geographic focus of the fund is mainly countries in West Africa and Central Africa.

South East Asia Clean Energy Fund
Type: Equity (indirect)
Country/region: Southeast Asia
Sector: Energy & Climate
Amount: MUSD 12

Sustainable economic development and reduced inequality in Southeast Asia can be made possible by making growth capital available to young companies whose business ideas actively contribute to accelerating the green transition in some of the region’s most fossil fuel intensive and rapidly growing economies.

Swedfund agreed on an indirect equity investment through a commitment of up to USD twelve million in Southeast Asia Clean Energy Fund II (SEACEF II). SEACEF II is an early-stage fund that invests in projects and companies in renewable energy, energy efficiency and e-mobility.

The fund focuses on countries in Southeast Asia, primarily Indonesia, Vietnam and the Philippines, and the investments are expected to contribute to climate change mitigation in a region characterised by high emissions from its largely fossil fuel-based energy production.

Evolution III
Type: Equity (indirect)
Country/region: Sub-Saharan Africa
Sector: Energy & Climate
Amount: MUSD 25

In sub-Saharan Africa, access to reliable and clean electricity still lags behind most other parts of the world. With an electrification rate of 46 percent, 590 million people still have no access to electricity, reinforcing socio-economic inequalities and hindering economic development.

We agreed on an indirect equity investment through a commitment of up to USD 25 million in the first closing of the fund Evolution III. Evolution III is a fund with a broad focus on investments in renewable energy and energy efficiency with a focus on several countries in sub-Saharan Africa. Swedfund has also invested in the fund manager’s previous fund Evolution II.

d.light
Type: Loan (direct)
Country/region: Sub-Saharan Africa, India
Sector: Energy & Climate
Amount: MUSD 1

Access to affordable and reliable electricity is an important factor for poverty reduction and job creation, and a prerequisite for achieving the Sustainable Development Goals.

An additional investment of up to USD one million was agreed in the existing portfolio company d.light. d.light operates in Africa and India and offers, amongst others, solar panels for off-grid energy supply in rural areas where there is often no connection to the larger electricity grids.

Swedfund has been a shareholder in d.light since 2018 and the current additional investment is in the form of a convertible loan.

Two kids studying under an electric light

Significant events during the year

The portfolio companies’ results