How IFU integrates sustainability and impact into the investment process?
As an impact investor sustainability and impact issues are integrated in the investment process from the first screening and until the investment is divested. First of all, a potential investment must fall within our country and sector focus. Moreover, it must fit the purpose of our impact criteria creating green, just and inclusive societies. This includes compliance with the EU taxonomy for green investments, for example. Finally, the activity must not be included on IFU’s exclusion list.
All investments are categorizes based on their identified environmental and social risk. The higher the risk the more comprehensive assessments will be made during due diligence.
“In general, IFU requires direct investments to comply with national regulation and to follow relevant international standards and principles.”
To ensure that the investees meet their environmental and social obligations, IFU and the investees agree on an action plan describing gaps and measures, which must be implemented within a certain timeframe.
The impact potential is also assessed in relation to the SDGs, and specific impact areas are identified. During the process this materializes into an impact creation plan that is implemented as part of IFU’s active ownership throughout the ownership period.
What are IFU’s priorities in Europe and MENA region?
Denmark and the EU have a strong commitment to the Eastern neighborhood with a special focus on Ukraine and Georgia and these two countries are also core focus countries for IFU. In terms of sector priorities, we pursue the same impact agenda as in any other regions and countries.
Healthcare is a relatively new sector for IFU, but it is already one of the primary focus areas. You’ve invested in Egypt, Morocco, India, Africa. Why have you chosen these countries and these projects?
As a key driver for our selection of healthcare projects we require that the investment will improve the access to quality healthcare for lower and middle-income patients at affordable prices. To achieve that goal, private healthcare must be integrated in the national healthcare ecosystem as a supplement to the public healthcare system in the given country e. g. by a regulatory framework for the private and/or public health insurance system.
What criteria the healthcare project or partner needs to meet to be considered by IFU to invest?
As a general rule, we partner up with companies and partners that have a proven track record in the business and a clear responsible investor and impact focus.
Are you interested in PPP projects? Under which conditions would you consider them?
The short answer is, we can invest in PPP projects. As for any project partnership to succeed, a successful PPP project will require that there has to be a common goal and a clear alignment of interests and expectations in the investor group. Also, there has to be a lead strategic (typically private) investor who is main responsible for driving the investment.
Interview by Natalia Domanska.