As part of the Danish government’s 2024 Africa Strategy, Impact Fund Denmark, together with the Danish Ministry of Foreign Affairs, is launching a new DKr 350-million Africa Facility to support Danish companies’ engagement and investments in Africa.

In a media release, Impact Fund Denmark notes that many of the world's fastest-growing economies are located in the Global South, especially in Africa.

Yet only 1.5% of Danish investments abroad go to Africa, and imports from Africa account for less than 1% of Denmark's total imports, it points out, noting that this shows untapped potential, which requires long-term commitment, risk-taking and persistence from the Danish business community and Danish investors.

"It is crucial that we increase Danish companies' investments in Africa. This is in our own interest and will benefit local African communities at the same time.

“The new Africa Facility is a good example of how we bring the private sector more into play and how we increase the interaction between development cooperation and economic diplomacy," says Denmark Foreign Affairs Minister Lars Løkke Rasmussen.

Impact Fund Denmark argues that expansion into new markets and rethinking value chains are crucial at a time of increased geopolitical uncertainty.

It notes that the Africa Facility improves Danish companies' access to finance with more flexibility and offers of technical assistance for promising projects.

"With the Africa Facility, we want to create a win-win situation where both African communities and Danish companies benefit.

“All our investments under the Africa Facility must be both commercially sustainable and generate positive societal impact. Together with the Danish companies, we look forward to strengthening our engagement in Africa," says Impact Fund Denmark CEO Lars Bo Bertram.

Like Impact Fund Denmark's other investments, investments under the Africa Facility must meet requirements for environmental, social and governance (ESG) impact and financial return.

In addition, investments must be located in a developing country.

However, the fund notes that the mandate of the Africa Facility is broader than usual, which means that more investments with Danish economic interests can be considered.

The specific requirements and opportunities for applying can be found on Impact Fund Denmark's website.

Impact Fund Denmark lists green energy and water supply, food and health as examples of areas with growth potential for Danish companies with innovative solutions and strong competencies.

It posits that there are plenty of untapped opportunities for partnerships between Denmark and Africa.

“Cross-cutting cooperation between public institutions, business organisations, the financial sector and impact investors is important to achieve success in this work.

“Impact Fund Denmark, therefore, offers risk finance and technical assistance to Danish companies promising commercial partnerships on the African continent. Dedicated advisors are ready to begin the dialogue on possible projects,” it says in the release.