• The project is located in one of NEFCO’s countries of operation.
• The project has a relevant environmental effect.
• The project is based on long-term cooperation through investments in enterprises, primarily though the formation of joint venture companies or corporate acquisitions.
• The project has a Nordic company or institution as business partner.
• The project is economically, financially, institutionally and technically viable.

Projects resulting in positive environmental effects for the Nordic countries and the surrounding seas can for example be related to modernisation of industrial plants and energy utilities. Another group consists of projects carried out in cooperation with municipalities and other authorities to supply environmental services, such as purification of water and waste water or waste management. A third category consists of companies that manufacture environmental equipment and equipment for more effective use of energy, or that supply consulting and engineering services within the field of environment and energy to create better conditions for the realization of environmental measures.

• Equity Investments
• Loans on market terms
• Loans with equity features
• Subordinated loans or mezzanine financing
• Guarantees

NEFCO’s participation in a project is generally in the range of 25-35% of the total financing. In large projects the portion would be smaller. According to present policy the maximum commitment for one project is approximately EUR 3 million. A commitment under EUR 125,000 will be considered only under special conditions, for example in the case of environmentally significant demonstration projects.

Prefeasibility Study: To have a better understanding of the proposed project, NEFCO normally requests the Project Sponsor to provide additional key information of the project in the form of a prefeasibility study, including preliminary calculations on financial feasibility, and a summary on environmental improvements.

Indication of Interest: A summary document is prepared by the Investment Manager and presented to the Board of Directors. The Board gives its approval to continue preparation of the project.

Feasibility Study: The project idea should be elaborated by the Project Sponsor in a more detailed study. The study should define and analyse environmental improvements, positive and negative environmental impacts, markets, production, technology, organization, financing, profitability etc.

Project Appraisal: Before project documents are submitted to the Board, the project is evaluated and appraised by NEFCO staff.

Investment Commission Review and Board Presentation: The Project is reviewed by the Investment Committee and then presented for the Board approval.

Negotiations and Signing of Agreements: NEFCO negotiates with the Project Sponsor to establish the terms and conditions of NEFCO’s participation in the project. The signing of agreements marks the formal acceptance by the Project Sponsor, NEFCO and any other participants of the terms and conditions under which NEFCO will finance the project.

Construction Period: Depending on the projects this stage can involve construction of buildings, and supply of machinery for the operational phase as well as the plant start-up.

Operational Period: Stage of normal operation and production.

Exit: NEFCO disinvests and withdraws from the project.