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Frequently Asked Questions

What does Danida Business Finance offer?

Danida Business Finance provides subsidised loans – in effect 10 year interest free loans - to developing countries investing in sustainable infrastructure in line with the Sustainable Development Goals.

What kind of projects do Danida Business Finance (DBF) support?

Danida Business Finance finances primarily public infrastructure projects in sectors like transportation, energy, water supply and sanitation. Projects in sector with Danish core competencies will be prioritized. This means that Danish companies should be internationally competitive - based on total project cost, that is not just purchase price but also operational cost.

Where do Danida Business Finance operate?

DBF is available in developing countries with a GNI per capita of maximum USD 4,035 and where at the same time Denmark has a representation. The current country list (2016) includes following countries: Afghanistan, Bangladesh, Burkina Faso, Egypt, Ethiopia, Ghana, India, Indonesia, Kenya, Mali, Morocco, Mozambique, Myanmar, Niger, Nigeria, Pakistan, Palestine, Philippines, Somalia, Tanzania, Uganda, Ukraine and Vietnam.

How can I apply for support?
For info on applications, please see: www.um.dk/en/danida-en/activities/business/finance/applyforsupport/

What does the DBF support cover?

 A DBF-subsidy consists of three elements:

  • All interest on the loan – both draw down and repayment period
  • Export Credit Premium and other financial costs
  • A cash grant to reduce the principal of the loan, if above does not amount to the subsidy level determined by the ruling OECD agreement. DBF does not cover management and commitment fee on the  loan. This is to be paid by borrower.

DBF also provides technical assistance on grant terms for tender procedures, monitoring etc.

How much support?

According to OECD rules, and depending on the developing country in question, the grant will be around 35 percent for middle-income countries and 50 percent for least developed countries.

Can everyone apply for support?

Official request for support must come from the public authorities in the recipient countries. However, private companies may also present project proposals to the DBF team for initial discussions on eligibility.

How are the project contractors chosen?

All projects must be tendered. As a point of departure tenders shall be limited to Danish suppliers. If lack of sufficient Danish tenderers international bidding may be chosen.

How can Danida Business Finance finance large projects with relatively small grants?

DBF do not provide the loans directly – this is done by private commercial banks. Private banks consider DBF support as equivalent to a sovereign guarantee and therefore practically risk free. Therefore, by providing a guarantee backed by the Danish state and providing a subsidy reducing investment cost for the local buyer, DBF can mobilise private financing that would not otherwise be available due to high risk and/or non-commercial viability of the projects.