Statement by the Managing Director

During the past year, Swedfund has gained increasing recognition within the Swedish business community and within Sweden’s international development cooperation. It is encouraging to see the growing Swedish interest in investing in emerging markets around the world, and we hope this interest will result  in numerous investment proposals with Swedfund as co-investor. We also hope that more enterpreneurs will see Africa of today for what it is – a continent full of exciting emerging markets that offers great investment potential and enjoys rapid economic growth.

Over the past 28 years, Swedfund has accumulated many good examples that demonstrates that it is possible to invest both sustainably and profitably in developing countries. Investments that becomes a win-win situation for all parties involved. When profitable investments create development effects they generate a return for the countries and enterprises involved, which  helps combatting poverty. By providing capital and sharing the companies’ risks, Swedfund reduces the risk exposure and enables the companies to go ahead with their investment plans sooner than would otherwise have been possible. By sharing our long and successful experience on these markets, we also make it easier for Swedish companies to etablish their new ventures.

New jobs reduce poverty

The World Bank survey Voices of the Poor is one of the world’s most important studies of poverty. The survey, in which more than 60 000 poor people in 60 countries were interviewed, highlights the fact that more than 70% of the world’s poor believe that the best way of escaping from poverty is to get a job. Half of the 950 million people in Africa are between five and 24 years of age.  If the private sector in Africa does not grow very rapidly, many of these young people will grow up without a chance of getting a job. Therefore, one important aspect of development co-operation is to promote enterprise-driven economic growth based on trade and investment.

The picture of Africa in Sweden has long been presented as a state of never-ending poverty and conflicts, but we have tended to overlook the positive developments and record high rates of growth that are typical of today’s Africa. We believe that it is high time to recognise Africa’s immense potential. Swedfund, which has been active in Africa for 28 years, took during 2007  decisions of new investments in Tanzania, Somalia, Ghana, Kenya and South Africa and in two Pan African companies , active in several countries. During the coming year, we hope to see more Swedish companies recognise the potential that a venture in Africa offers and consequently also contribute to the development co-operation goals. In total Swedfund gave the go-ahead to investments for MSEK 908 in 2007.

Immigrant entrepreneurs, environmental technology and post conflict areas

In addition to its core activities, Swedfund has the government’s mandate to promote pilot investments in (1) environmental technology and energy, (2) co-operation with Swedish entrepreneurs with immigrant backgrounds, and in (3) post conflict areas. Sweden has numerous individuals with immigrant backgrounds who have built up successful enterprises. Many of them would like to invest and set up businesses in their country of origin, and by investing jointly with Swedfund they will increase their prospects of success. In areas that have experienced conflict, private sector development, job creation, and combating poverty have to get off to a quick start.  Otherwise, there is a serious risk of relapse of fighting and conflict. As far as Swedfund is concerned, it is important to demonstrate that it is possible to carry out investments under challenging conditions. Swedfund also aims to find innovative means of facilitating and contributing to the establishment of Swedish environmental technology companies in emerging markets.

A vibrant economy creates sustainable development

Rapid growth in the private sector is one of the keys to sustainable development in poor countries. Swedfund is also ready to make direct investments in the foreign subsidiaries of Swedish enterprises. As a minority shareholder, we allow our industrial partner to retain control. Our goal is to promote what we believe in – a private sector that contributes to growth and thereby enables people to escape from poverty. To verify that our investments generate development effects, we have introduced a new system for evaluating these effects. We are gratified to note that Swedish companies are often ready to accept not only their responsibility for the environment but also their corporate social responsibility (CSR), and as we share the same basic attitudes it becomes easy to work together.

Swedfund is going through a period of growth. We are constantly endeavouring to run our business even more effectively, so that we can make the best possible contribution to Swedish development co-operation and to economic growth and combating poverty in developing countries. During the coming year we hope to be able to work together with and involve even more Swedish companies in this process.

Björn Blomberg
Managing Director