Overhaul of the Finnfund Act circulated for comments

A consultation round on the draft Government proposal on a comprehensive revision of the Finnfund Act was launched by the Ministry for Foreign Affairs. Comments are welcomed online at lausuntopalvelu.fi until 23.59 on 30 June 2025.

The Ministry for Foreign Affairs started preparing the reform of the Finnfund Act in 2022. In February 2023, it appointed a working group for the term 1 March 2023 to 31 December 2024 to assess the need for and prepare legislative amendments that relate to different modes of private-sector collaboration in development cooperation and to development policy loans and investments, while observing any other needs to amend development cooperation legislation.

Enacted in the 1970s, the Finnfund Act has not been amended since 2005. The objective of this legislative reform is to bring Finnfund’s activities in line with the current interpretation of the Constitution of Finland, improve their effectiveness and strengthen the role of the private sector in Finland’s development cooperation.

Proposed amendments

It is proposed that a new act be enacted on a limited liability company Finnfund Oy. At the same time, the current Act on the Finnish Fund for Industrial Cooperation Ltd would be repealed and the company’s name would be formally changed to Finnfund Oy. The necessary name changes would also be made to other relevant acts.

Within the new structure, Finnfund Oy is set to form a group in which the parent company would carry on business and its subsidiary would perform public administrative duties in accordance with section 124 of the Constitution of Finland as required by the Constitution.

The company's line of business would be expanded to enable it to channel funding also through companies that are not registered in developing countries, provided that the investments will be directed at developing countries.

The reform supports the objectives of the Report on International Economic Relations and Development Cooperation

The reform implements the objectives presented in the Report on International Economic Relations and Development Cooperation (Publications of the Finnish Government 2024:37). The report emphasises the need to promote private capital mobilisation in developing countries. In this context, the Government proposal sets out mechanisms to facilitate the participation of companies in Finnfund’s commercial investments. The reform also supports the policy outlined in the Programme of Prime Minister Orpo’s Government, according to which public money can be used to build an operating environment, but achieving permanent change requires private investments and private entities.

Comments on the draft Government proposal can be submitted online at lausuntopalvelu.fi (page in Finnish)Linkki toiselle sivustolle until 23.59 on 30 June 2025. 

The proposal was prepared at the Ministry for Foreign Affairs as preparatory work by public officials, in consultation with key stakeholders. The Government proposal is due to be submitted to Parliament during the autumn session of 2025.