Africa absorbed the vast majority of new investments made by Swedfund, Sweden’s development finance institution (DFI), in 2024, highlighting the continent’s critical need for development capital amid a backdrop of heightened global instability. According to the organisation’s newly released Integrated Annual and Sustainability Report, 13 out of 15 investments, representing $229 million of a total $249 million, were directed towards African nations.
The significant allocation to Africa comes at a time when the global landscape is marked by wars, conflicts, and macroeconomic headwinds, factors that have amplified the urgency for development finance. Swedfund, tasked with reducing poverty through sustainable investments in developing countries, channelled a total of SEK 2.7 billion ($270 million) into various sectors last year, while also reporting a positive financial result with an operating profit of SEK 376 million ($37.6 million).
While Africa took centre stage in terms of the number of new projects, Swedfund also prioritised Ukraine in 2024, committing to 25 new initiatives focused on critical infrastructure. This commitment followed an additional allocation of SEK 300 million ($30 million) from the Swedish government for investments in the war-torn nation, and the subsequent decision to open an office in Kyiv.
Despite the focus on Ukraine, the sheer volume of investment directed towards Africa highlights the continent’s persistent development challenges and the strategic importance Swedfund places on the region. The investments span a range of sectors crucial for sustainable development, including food systems, energy and climate, and sustainable enterprises.
Notable African investments in 2024 included a $5 million loan to Apollo Agriculture, an agri-fintech company operating in Kenya and Zambia, aimed at bolstering food security for smallholder farmers. In the energy sector, Swedfund made a $22 million equity investment in Sturdee Energy, an independent power producer in South Africa, Botswana, and Namibia, to accelerate the transition to renewable energy.
Furthermore, Swedfund participated in several investment funds targeting the continent, such as the Novastar III Africa People+Planet Fund, the Emerging Africa & Asia Infrastructure Fund, AfricInvest Small Cap Fund, and Inside Equity Fund II, demonstrating a multi-pronged approach to deploying capital.
“We recognise that our investments make a difference to those who need it the most,” said Maria Håkansson, Swedfund’s CEO, in the report. “Increased growth, sustainable societies and reduced poverty require increased investment by development finance institutions such as Swedfund and other actors.”
The report also revealed positive trends across Swedfund’s portfolio. The total value of investments reached SEK 13 billion ($1.3 billion), a SEK 3 billion ($300 million) increase from the previous year. The number of jobs within Swedfund-backed companies also grew, with nearly half of the portfolio reporting an increase in employment. Moreover, greenhouse gas emissions per invested SEK decreased by 16 percent, indicating a growing emphasis on environmentally sustainable investments.
Swedfund’s financial performance remained robust, meeting its target of a positive operating profit over a rolling five-year period. The investment portfolio’s internal rate of return (IRR) also saw a positive development, reaching 5.6 percent. A summary of EBIT for the last five-year period 2020–2024 shows that total operating profit amounted to just under SEK 250 million ($25 million) or an average of SEK 50 million ($5 million) per year. EBIT for the 2024 financial year amounted to SEK 376.4 million ($37.64 million) (-SEK 103.4 million [-$10.34 million]). EBIT excluding exchange rate effects amounted to SEK 68.7 million ($6.87 million) (-SEK 15.7 million [-$1.57 million]) during the year. Swedfund’s return on investing activities during the 2024 financial year was SEK 538.1 million ($53.81 million) (SEK 27.4 million [$2.74 million]).
The DFI’s commitment to responsible investment is further underscored by its adherence to international standards. By the end of 2023, 97 percent of its portfolio companies complied with the ILO Core Conventions for decent working conditions, and 66 percent adhered to the 2X Criteria for women’s economic empowerment.
Looking ahead to 2025, Håkansson emphasised the continued importance of investing in Ukraine, particularly in job creation and the reconstruction of critical infrastructure. However, the 2024 figures firmly establish Africa as a primary focus for Swedfund’s development finance efforts, reflecting the continent’s ongoing need for capital to drive sustainable growth and alleviate poverty in a turbulent global environment.