Investment criteria and cycle

How we assess investments

Our task is to accelerate the green transition. This means our financing is available only to Nordic companies, investments and solutions that can be proven to have a positive environmental impact. The potential for scaling on global markets is also a consideration. Our investment and environmental criteria guide our financing decisions.

Our investment criteria

• Environmentally sustainable solutions
• Evaluation against the environmental drivers (EU Taxonomy) and Nefco’s own environmental and sustainability criteria
• Technical and financial viability
• Technology scale-up potential
• Mitigation of potential environmental and social risks

Environmental and sustainability criteria 

We evaluate project proposals and expected impact against the EU Taxonomy, the UN Sustainable Development Goals and our own environmental and sustainability criteria.

Following the implementation of a project, we conduct an assessment of its environmental and climate-related results. Every project we finance is subject to mandatory regular reporting of its environmental and/or climate-related achievements.

Read more about how we assess impact

Sectors we finance

Typical investments may be related to the following sectors: circular economy; energy and energy efficiency; food, agriculture and forest; manufacturing and materials; transportation and e-mobility; water, seas and oceans.

Our investment cycle

1. First enquiry: Interested Nordic SMEs contact Nefco’s investment experts and present their investment proposal.
2. Investment proposal: Nefco requests a financing proposal and business plan to gain a deeper understanding of the proposed investment. Nefco’s environmental specialists give their preliminary view on environmental benefits and risks.
3. The investment proposal enters Nefco’s pipeline: If screening deems the investment of interest to Nefco, it is accepted into the pipeline. Full financial analysis and risk assessment of the investment proposal is carried out. Compliance due diligence is done, as well as further work to assess environmental considerations. A Project Manager presents an investment proposal to the Nefco Investment Committee.
4. Clearance in Principle: Once approved by the Nefco Investment Committee, the project is considered by the Nefco Board for Clearance in Principle. Further analysis is conducted if needed. If the project passes this stage, a Term Sheet is prepared by Nefco setting out the offered terms and conditions for financing.
5. Approval: The project proposal is submitted to the Nefco Board for approval. Loan agreements are prepared and signed followed by disbursement of funds in one or several tranches.
6. Project implementation and monitoring: If approved, investment documentation (as set out by the Term Sheet) begins. Nefco requires information that enables the monitoring of the implementation and the environmental and financial performance of the investment.