November / 2018

October / 2018

Norway doubles down on climate forest aid as deforestation continues to rise

A decade has passed since Norway became the world’s largest forest donor. In an interview with Development Today, Climate Minister Ola Elvestuen sheds light on the status of the multi-billion-dollar climate forest programme in key recipient countries. In Indonesia performance-based payments could begin by 2020. The Amalia Falls hydropower dam in Guyana, which Norway has been pushing for years, is off the table. Regarding Brazil, Elvestuen shifts the Norwegian narrative, admitting it is impossible to say to what degree rainforest payments have contributed to reduced deforestation.

Billion-dollar vaccine subsidy. Donors reject proposed changes aimed at pushing down price

Donors refuse to ring-fence the remaining money in a billion-dollar pneumonia vaccine fund and give it to an Indian pharmaceutical that can push down the price dramatically. Most of the money has gone to the two big pharma companies, GSK and Pfizer, which dominate the market and, critics say, prevent price competition.

Tied Finnish mixed credit scheme in high demand

A new, tied aid-financed scheme for infrastructure projects is in high demand among Finnish export firms. Only one in six projects made it through the needle’s eye this year. NGOs and the OECD have criticised Finland’s practice of linking aid to its own exporters.

Danish business group lukewarm on private sector aid scheme linked to NGOs

When a conventional approach to promoting private sector aid failed to produce long-lasting results, Danida came up with a new model for stimulating good business ideas and jobs in developing countries - with NGOs as a key part of the equation. The reaction from the Danish private sector is mixed.

Grim assessment: 10 years of REDD+ has not slowed deforestation

The REDD+ concept, which was based on the deceptively simple idea that giving cash to forest-rich countries would incentivise them to protect their forests, raised huge expectations a decade ago. With USD 2.7 billion committed, 60 per cent of this from Norway, REDD+ has not slowed deforestation, a team of researchers conclude in a new book published by CIFOR. Still, they say, REDD+ should not be abandoned.

Norfund prepares new growth strategy as Thorleifsson takes over

A venture capitalist with a soft spot for smallholder farmers in Africa and a strong stomach for risk taking,Tellef Thorleifsson has taken over the helm of Norfund, the 22-billion-crown aid-financed investment fund in Oslo. His first task is to oversee a new Norfund strategy.

Nordic donors divided over best response to homophobic crackdown in Tanzania

While Denmark has frozen DKK 65 million in aid in response to the anti-gay crackdown in Dar es Salaam, Norway is opting for diplomacy. Norwegian Development Minister Nikolai Astrup will raise his concern about the rise of homophobia during his visit to Tanzania this week, but withholding aid is not on his agenda.

Sida to decide on major aid package in wake of Solheim’s departure from UNEP

Just days after the embattled UNEP chief Erik Solheim announced his resignation, the Swedish agency Sida tells Development Today that it is preparing to decide on a large aid package to the Nairobi-based agency. The funding was put on hold in September in response to revelations in an on-going audit of excessive travelling costs incurred by Solheim and his staff.

Danish financing window links businesses with non-commercial actors to promote SDGs

Ecological coffee, recycling of plastic from used fishing equipment and digital solutions for enhancing agricultural production. These are among the ten projects awarded grants from Danida’s unique business financing window.

Save the Children calls for halt in Gavi vaccine subsidies to two pharma giants

The donor-funded vaccine alliance Gavi has over the last decade spent more than USD 1.2 billion out of its special fund for pneumonia vaccine, the AMC, on two Western pharma giants GSK and Pfizer. The AMC was supposed to encourage new suppliers to enter the market. Save the Children now wants Gavi to reserve the remaining AMC money for the Indian supplier Serum Institute.

Norway to disburse NOK 600m to support Brazil’s rainforest

Norway has decided to pay USD 70 million (NOK 600 million) to Brazil for reduced emissions from deforestation in the Amazon in 2017, the Climate Ministry announces in a press release. Climate Minister Ola Elvestuen calls the climate forest cooperation with Brazil a “great success,” but says recent trends give “reasons for concern.”

Swedish caretaker government: aid at 1% of GNI in 2019, few clues about priorities

The current Swedish administration, which is acting as a caretaker government, proposes that aid remains at 1 per cent of Gross National Income (GNI) next year, but provides few details about priorities.

Back to Bujagali. Stepping stone for SN Power to expand in Africa

The partly aid-financed Norwegian hydropower investor SN Power bought a major stake in Uganda’s Bujagali hydropower project in July. Fifteen years ago, SN Power turned down a World Bank offer to become an owner in the project, but now the company sees its newest acquisition as a stepping stone for expansion in the African market, CEO Torger Lien tells Development Today.

GFF health initiative fails to reach USD 2 billion replenishment target

The Global Financing Facility (GFF), a World Bank-managed trust fund for health and nutrition, raised only a fraction of the new money it needed to achieve a USD 2 billion target at its first replenishment meeting in Oslo this week.

How Finnfund can take more risk in fragile states and pioneering projects

Finnfund raises half its project funding from private markets and is less capitalised than its Nordic sister organisations. A new special guarantee scheme is designed to make Finnfund able to invest in pioneer projects and fragile states, without jeopardising its trust with lending banks.

Sweden turns down Norwegian-sponsored GFF health initiative

Sweden will not pledge funding for the Global Financing Facility (GFF) health initiative at a donor meeting in Oslo next month. “We have a health architecture that is already very crowded, and we do not think that we need a new structure,” says Anders Nordström, Sweden’s Global Health Ambassador, to Development Today.

What killed budget support: ‘Schizophrenic’ donors couldn’t let go of aid conditionality

General budget support, a popular instrument in the aid tool box during the 2000s, was effective and cheaper than project aid. Donors abandoned it because of their latent mistrust of recipient governments, a new study concludes.

Indonesia-Norway climate forest deal. Six years behind schedule, but still relevant

Norwegian result payments for Indonesian forest protection have not materialised nine years after a cooperation agreement was signed. An evaluation urges Norway to make its first carbon payment by 2020 and concludes that the bilateral deal is still relevant.

Solheim in hot water, navigating to regain donor trust

A team of experts from UN headquarters in New York is helping the Nairobi-based UN Environment Program get its financial house in order. Following a critical audit, a new deputy has been given a key role in the agency’s sweep up, and Erik Solheim pledges to spend less time on the road.

Travel audit rattles UNEP. Wary donors hold back EUR 16 million

The stakes are high for the UN environmental agency (UNEP) in the wake of an on-going audit which reveals excessive travel costs incurred by the agency’s leadership. Denmark, the Netherlands and Sweden are holding back EUR 16 million in grants that were originally planned to be disbursed this year.

Report: Norway’s inefficient and confusing aid administration

In a donor landscape where most aid management is either delegated to a separate directorate or integrated into a foreign ministry, Norway is the only OECD country that splits grant management between a ministry and its aid agency, according to a new report commissioned by Development Minister Nikolai Astrup. This, the report concludes, creates both inefficiency and confusion.

Risk of GFF health scheme becoming a debt trap for poor countries

As the Global Financing Facility (GFF) gears up for its first replenishment next month, there are warnings that by making poor countries take up World Bank loans, the ambitious health scheme could lead to increased indebtedness.

Fragile states, energy investments top priority in Norwegian budget

Thematic priorities like clean oceans and renewable energy investments are winners in a growing Norwegian aid budget. Support for fragile states, stemming migration and combatting terror are other top priorities, while civil society and core funding to UN agencies benefit less.

First Nordic test of new reporting rules for refugee aid beefs up ODA

Denmark, being the first Nordic country to use the OECD’s new reporting regime for counting domestic refugee expenses as official aid, has concluded that it can increase reporting of such aid by 60 per cent for 2017.

Denmark scales up education aid, part of broader strategy to stem migration

Denmark will scale up education efforts and private sector aid next year, but at the heart of the aid budget is managing “irregular migration and fighting its fundamental causes.” The Danes will expand their use of aid as a tool to return asylum seekers to their home countries in a tit-for-tat approach.

Yet another lean year, but light in the tunnel for Finnish aid

The Finnish government proposes EUR 994 million in aid next year, marking the fourth lean aid budget in a row since the historic aid cuts announced in the summer of 2015. Nevertheless, the Finnish aid community sees a light in the tunnel.

An alternative DFI: FinnChurchAid kicks off new investment firm

In a pioneering move, the Helsinki-based NGO FinnChurchAid (FCA) has launched an investment company that will manage a EUR 16 million loan from the Finnish government to be invested in small businesses in African and Asian countries, the first of its kind in the Nordic countries.

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MARKET AND BUSINESS

Back to Bujagali. Stepping stone for SN Power to expand in Africa

How Finnfund can take more risk in fragile states and pioneering projects

An alternative DFI: FinnChurchAid kicks off new investment firm

Finnfund invests in multiple tree plantations in Africa and Latin America

Finnfund has committed USD 10 million to a new forestry fund, the Arbaro Fund, that will invest in industrial tree plantations in 12 countries in Sub-Saharan Africa and Latin America over the next 15 years.

Tommy Thomsen leaves IFU, Huss to act as new CEO

Torben Huss will become acting chief of the Danish aid-financed risk capital fund IFU when the current CEO Tommy Thomsen leaves the organisation to take up a new assignment in the private sector.

Report: investment landscape turned upside down

Financial reform advocate Sony Kapoor says DFIs like Swedfund and Norfund can be important partners for forming bridges between Western institutional investors and promising emerging markets.