CEO: Swedfund’s role in a more uncertain world

Swedfund’s mission is to contribute to poverty reduction through sustainable investments. That mission is more relevant than ever. Swedfund operates in a rapidly changing environment where risk levels have increased in many countries. Despite this, Swedfund’s portfolio has continued to deliver stable results. In a context of high uncertainty, experience in complex markets, regional presence and strong risk management capabilities are critical. In many low- and middle-income countries, development has slowed, while the need for long-term capital, expertise and partnerships is increasing.

Today, around 839 million people live in extreme poverty, defined as an income below three US dollars per day. Poverty is not only about lack of income. It also concerns limited access to jobs, electricity, food, financial services, infrastructure and digital connectivity. Breaking these patterns requires investments that create jobs with decent working conditions, strengthen companies, scale innovative business models and contribute to inclusive economies where women and men can participate on equal terms.

In dialogue with companies, public actors and partners in the countries where we operate, the picture is clear. Investment needs are great, but so are the opportunities. Africa is the continent with the fastest growing population, with a young generation driving entrepreneurship and demand. Companies with strong momentum and innovative business models are scaling solutions in energy, digitalisation and financial services. The ambition to grow and create jobs is clear. Economic growth in Africa is estimated to have reached 3.9 percent in 2025, with a forecast of 4.3 percent for 2026. At the same time, Swedfund closely monitors the risks posed by conflicts and regional instability, as these can quickly have consequences for both people and investments.

Swedfund’s strategy for the period 2024 to 2030 addresses these structural needs. Our ambition is to triple our portfolio to scale our impact through investments in the private sector and through feasibility studies and capacity building in public infrastructure via the Project Accelerator. Geographically, we prioritise Sub Saharan Africa, South and Southeast Asia and Ukraine. Two years into the strategy period we can conclude that the portfolio and our results are developing in line with the strategy. 

At the end of 2025, the value of Swedfund’s portfolio amounted to approximately SEK 14 billion, with an internal rate of return (IRR) of 5.1 percent. During the year we made 22 new investments, and the Project Accelerator initiated 36 projects. Together this reflects both a high level of activity and our role as an additional and catalytic actor in countries where access to long-term capital is limited.

For 2025 the Swedish Parliament decided on a capital contribution to Swedfund of SEK 1.8 billion, of which SEK 600 million was earmarked for climate investments and up to SEK 500 million for investments in Ukraine. Together with reflows from the portfolio this enabled an investment volume of approximately SEK 3.7 billion during the year. The Project Accelerator was allocated SEK 270 million, of which SEK 110 million was earmarked for Ukraine and the surrounding region. Together, this strengthens our ability to invest in businesses and infrastructure that contribute to job creation, strengthened women’s economic empowerment, reduced emissions and increased resilience.

During the year we continued to increase our investments and projects in Ukraine. Swedfund has opened a local office and strengthened its presence by building investment and sustainability expertise on site. Long-term investments are crucial for Ukraine’s economic resilience. A functioning private sector and robust infrastructure create jobs, stability and confidence in the future. Through investments and feasibility studies in critical infrastructure, Swedfund can contribute to sustainable solutions and lay the foundation for long-term reconstruction.

At the same time, more than two thirds of Swedfund’s investments remain concentrated in Sub Saharan Africa, and one third of the portfolio is in countries classified as fragile and least developed.

Our business model, which rests on three pillars – development impact, financial sustainability and sustainability – demonstrates that sustainable investments with strong returns are possible even in complex contexts. This confirms the robustness of the model and its ability to deliver in line with our specific public mission. Swedfund achieves the targets that follow from the mission, including women’s economic empowerment, jobs in accordance with the ILO core conventions, climate action, capital mobilisation and the profitability of portfolio companies.

Swedfund’s financial target means that adjusted operating profit (EBIT) should be positive measured over a five-year period. At the end of 2025 this target had been achieved through an accumulated adjusted operating profit of SEK 45 million. The return of the investment portfolio, measured as internal rate of return (IRR) excluding exchange rate effects, amounted to 5.1 percent at the end of the year compared with 5.6 percent the previous year. The outcome reflects a year of high volatility, but also a portfolio that over time is financially sustainable in relation to our mission.

Operating profit (EBIT) for the full year 2025 amounted to SEK -589 million. The result has been negatively affected by currency effects, where the majority relates to unrealised translation effects that do not reflect the underlying development of the portfolio. Excluding currency effects, operating profit (EBIT) for the full year amounts to SEK 69 million, which shows an underlying stable financial performance.

I would like to extend a warm thank you to all employees for your commitment and your work during the year. Our role is clear. With impact as our guiding principle, Swedfund invests to reduce poverty and create sustainable growth in the world’s most vulnerable countries. Our business model shows that sustainable investments with good returns are possible even in complex countries, and that through partnerships and risk sharing we can mobilise additional capital.

From investments in renewable energy and financial inclusion in Africa to efforts supporting the reconstruction of Ukraine’s infrastructure, Swedfund’s work contributes to long-term development and shows the way forward.

Maria Hammarskjöld Håkansson, CEO

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