MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Miljø- og Fødevareudvalget 2015-16
MOF Alm.del Bilag 471
Offentligt

Nordic

Environment

Finance

Corporation

Annual

Review

2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Contents

Highlights of the year

NEFCO in brief

Interview with

NEFCO’s Managing Director

Climate change

The Baltic Sea

Case study 1

Cleaner water

in Petrozavodsk

Case study 2

Green shelter

for refugees in Antonivka

Green growth

The Arctic

Report of the

Board of Directors 2015

Case study 3

Saving energy

at a brickworks in Vitebsk

Environmental status

report 2015

Examples of emission

reductions in 2015

Statement of comprehensive income

Statement of financial position

Changes in equity

Cash flow statement

Independent Auditors’ Report

Statement by the

Control Committee

Approved projects 2015

Case study 4

Agricultural

waste turned into energy

Five year comparison

Personnel and Board members 2015

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Highlights

of the year

2015

JANUARY

NEFCO and the Belarusian

government sign a frame-

work agreement acknow-

ledging NEFCO’s status as

an international financial

institution in Belarus.

–

The Norwegian Carbon

Procurement Facility (Nor-

CaP) contracts 18.86 million

certified emission reduc-

tion units (CERs) from ten

projects.

FEBRUARY

The Nordic Climate Facility

receives in total 58 appli-

cations in its fifth call for

proposals.

–

NEFCO signs loan agree-

ments with the Ukrainian

cities of Severodonetsk and

Ivano-Frankivsk in order

to support investments in

municipal energy efficiency

measures.

MARCH

The Nordic Project Fund

approves financing for 13

new projects supporting

the internationalisation of

Nordic small and medium-

sized enterprises.

–

NEFCO’s financial accounts

for 2014 show that 154 new

projects were approved by

the corporation during the

period.

APRIL

The Finnish Government

announces that it will

pledge EUR 3 million to the

Nordic energy efficiency

and humanitarian support

initiative in Ukraine.

MAY

The Nordic Council of Min-

isters releases new report

on how to scale up invest-

ments in climate finance.

PATRIK RASTENBERGER

←

Restart. NEFCO’s client

Nelja Energia produces

biogas from cattle manure in

Oisu, Estonia. In September,

NEFCO decided to resume its

business activities in Estonia,

Latvia, Lithuania and Poland.

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

JUNE

NEFCO hosts the Steer-

ing Group meeting for

the Northern Dimension

Environmental Partnership

(NDEP) in Helsinki.

JULY

A second call for proposals

under the NEFCO Norwe-

gian Carbon Procurement

Facility resulted in the

signing of five new projects

with an estimated delivery

of 7.6 million carbon credits.

–

NEFCO signs five new

grant agreements aimed

at financing energy ef-

ficiency measures in the

cities of Pavlograd, Lozova,

Berdiansk, Severodonetsk

and Kramatorsk in eastern

Ukraine.

AUGUST

The framework agreement

between NEFCO and the

Republic of Belarus enters

into force.

–

NEFCO signs new loan

agreements with the

agricultural companies

Halychyna Zahid LLC and

Pivdenagropererobka LLC in

Ukraine.

SEPTEMBER

NEFCO’s Board of Directors

decides that NEFCO will

restart its investment op-

erations in Poland, Estonia,

Latvia and Lithuania.

–

The DemoUkrainaDH fund-

ing programme launches its

third Call for Applications

for demonstration projects

in the district heating sector

in Ukraine.

OCTOBER

The EU Commission

confirms that NEFCO

has passed the EC pillar

assessment. In practice,

this means that NEFCO is

eligible to manage EU funds

related to environmental

investments.

NOVEMBER

Three Nordic Climate

Facility (NCF) supported

projects are among the 16

United Nations’ Momentum

for Change climate change

award winners.

–

NEFCO and the Ukrain-

ian agricultural company

Danosha Ltd sign a loan

agreement to finance a

biogas plant in connection

to the company’s piggery in

the Ivano-Frankivsk region.

VITA THOMSEN/NORDEN.ORG

PATRIK RASTENBERGER

Skyline in Minsk. In January,

NEFCO and the Belarusian

government signed a frame-

work agreement acknowl-

edging NEFCO’s status as an

international financial institu-

tion in Belarus.

Paying attention. NEFCO hosted

six side events at the Nordic

pavilion at the COP21 climate

conference in Paris.

DECEMBER

The Danish Ministry of

Foreign Affairs and NEFCO

establish a trust fund that

will provide financial sup-

port for energy efficiency

demonstration projects in

Georgia.

–

The Swedish Agency for

Marine and Water Manage-

ment replenished the Baltic

Sea Action Plan Fund with

SEK 12 million.

–

NEFCO hosts six side-

events at the COP21 Sum-

mit in Paris.

←

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

NEFCO

in brief

The Nordic Environment Finance Corpora-

tion (NEFCO)

is an international financial

institution established in 1990 by the five

Nordic countries: Denmark, Finland, Ice-

land, Norway, and Sweden.

NEFCO’s green financing is targeted at

● To continue its successful activities

targeting the reduction of pollutants

affecting the Baltic Sea and the Arctic

and Barents regions, and

The current main priorities for NEFCO are:

small and medium-sized projects (SMPs)

with demonstration value. Many of the

ised by a pioneering spirit and aimed at

SMPs financed by NEFCO are character-

testing Nordic solutions with up-scaling

possibilities. Based on its experiences from

the field, NEFCO has participated in the de-

velopment of innovative financing instru-

ment and combat climate change. NEFCO

typically works in close partnerships with

tion to its financing of public investments,

ible hands-on approach, has developed an

ments designed to improve the environ-

its private and public investors. In rela-

NEFCO, through the application of a flex-

ability to assist borrowers efficiently in the

identification, development, implementa-

tion and administration of environmen-

government-financed financiers/facilities

Institutions, such as EBRD.

tal projects and to make them attractive

also to other financiers, including other

as well as larger International Financial

need to demonstrate that they will benefit

All projects to be financed by NEFCO

● To enhance its existing activities and

initiate new interventions related to

the promotion of green growth and to

further prevent climate change with

a focus on interventions related to re-

the reduction of short-lived climate

carbon markets.

newable energy, energy efficiency and

pollutants, having a positive effect on

adaption and mitigation, including the

Within these environmental priorities, fo-

potential catalytic, capacity-building or

up-scaling effects. To achieve this, NEFCO

cus is put on demonstration projects with

will continue to work closely with its own-

ers, the Nordic countries and in partner-

ship with relevant Nordic business sectors,

as well as other international financial in-

relevant to the Nordic governments.

stitutions, the EU and other stakeholders

the environment in a cost-effective way. To

ensure that these benefits will in fact ma-

against monitored milestone results, and

terialise, financing is released in tranches

environmental outcomes are monitored

annually for as long as NEFCO is involved.

of corruption and increases the require-

This approach effectively mitigates the risk

ments for borrowers’ capacity building,

transparency and accountability. It also

ensures improved predictability and sus-

tainability of the project.

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Interview

with Magnus

Rystedt

NEFCO’S MANAGING DIRECTOR

How would you sum up NEFCO’s

business activities in 2015?

When assessing all the funds managed

by us, we succeeded in approving 165 new

projects to a total value of EUR 107.8 mil-

tivity proceeded as expected in 2015. The

lion. Despite the problematic situation in

Russia and Ukraine, the investment ac-

bulk of the investments related to energy

efficiency projects and support for cleaner

regards our geographic investment man-

date, NEFCO’s Board of Directors decided

the way for new opportunities for us. In

PHOTO: PATRIK RASTENBERGER

production in various fields of industry. As

to resume our operations in Estonia, Lat-

via, Lithuania and Poland. This will pave

August, the Belarusian parliament ratified

the status agreement acknowledging our

status as an international financial institu-

tion in the country. With the help of this

municipal projects in Belarus.

agreement, we will now be able to roll out

ment gained increased importance. Five

new trust funds were established, and,

ed to a total value of EUR 345 million.

In addition to this, our fund manage-

by the end of the year, NEFCO’s fund

management assignments amount-

Managing Director

Magnus Rystedt has

headed NEFCO since 2006.

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

In recognition of our fund management

standards, NEFCO successfully passed

the European Commission’s pillar as-

sessment in 2015, which gives us the op-

by the EU.

portunity to serve as an implementing

agency of environmental projects funded

What is the state of play with NEFCO’s

new strategy?

Our Board of Directors approved the new

strategy last year. The proposal is now be-

vironment and relevant political decision-

makers in each of the Nordic countries. We

ing reviewed by the Ministries of the En-

hope to be able to launch the new strategy

in December this year. The strategy aims

to reinforce NEFCO’s position as a finan-

green growth by lending support to small

cier of climate-friendly initiatives and

and medium-sized projects. By doing this,

we can increase synergies between fund

activities.

assignments and NEFCO’s investment

NEFCO’s municipal investments in

Ukraine appear to be at the forefront

of your activities in 2015. Can you shed

some light on this?

Ukraine is becoming increasingly impor-

active projects in the country, and we are

increasing number of municipalities are

looking for options to cut their energy

tant to us. We currently have some 150

well represented throughout Ukraine. An

consumption. We can provide loans for

these investments and make such plans

Ukrainian authorities, the Nordic gov-

ernments and the Eastern Europe Energy

Efficiency and Environmental Partner-

ship (E5P). So far, NEFCO has invested in

For example, our project activities in day-

155,000 children in Ukraine.

62 energy efficiency projects in 39 mu-

care centres and schools have benefited

nicipalities in all parts of the country.

reality in close co-operation with the

The Arctic project portfolio also

experienced some new additions last

year. What are you doing in the Arctic

right now?

NEFCO has been entrusted to administer

ment (PSI) to support environmental in-

committee of contributors has already con-

vened five times at NEFCO’s premises, and

a number of tangible projects have been

approved and implemented. Most of the

persistent organic pollutants affecting the

vulnerable Arctic environment.

business operations in 2016?

First of all, we will prepare ourselves to make

sure that the new strategy is put in place and

adopted accordingly by the end of this year.

Moreover, we will try to develop our fund

management activities and broaden the

Energy Efficiency and Humanitarian Sup-

port Initiative Fund will also back up a num-

affected by the conflict in eastern Ukraine.

date, we are looking forward to financing

scope of new fund assignments. The Nordic

ber of new projects in cities that have been

As regards our expanded geographic man-

new projects in Armenia, Georgia, Moldova,

Estonia, Latvia, Lithuania and Poland in or-

der to diversify our project portfolio. And

that NEFCO turns 25 this year. Consequently,

ways during 2016.

last, but not least, I want to remind everyone

we will commemorate this in a number of

What will be the main focus of NEFCO’s

the Arctic Council Project Support Instru-

vestments in the Russian Arctic. The fund’s

projects deal with the prevention of emis-

sions of black carbon or the mitigation of

We are looking

forward to financ-

ing new projects in

Armenia, Georgia,

Moldova, Estonia,

Latvia, Lithuania

and Poland in

order to diversify

our project port-

folio.

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Climate

change

FOCUS AREA

The bulk of NEFCO’s investment activities

are still centred around projects related to

measures. In 2015, 35.8 per cent of all pro-

jects financed by NEFCO’s main financial

instruments were in the energy sector.

Moreover, most projects co-financed by

NEFCO in the industrial sector included

climate emission reductions. According

renewable energy and energy-efficiency

port the implementation of a total of 20

demonstration projects in municipal dis-

trict heating systems throughout Ukraine.

DemoUkrainaDH is managed by NEFCO

and was established in co-operation with

Construction, Housing and Municipal

the Ministry for Regional Development,

Economy of Ukraine. Sweden and the

Eastern Europe Energy Efficiency and En-

programme.

vironment Partnership (E5P) have provided

The NEFCO Norwegian Carbon Pro-

grant financing for the DemoUkrainaDH

curement Facility (NorCaP), established by

Norway in 2013 with NEFCO as the facility

energy-efficiency measures with tangible

to NEFCO’s environmental status report,

the climate investments in 2015 reduced

measures, NEFCO managed to reduce

energy consumption by 13,861 gigawatt-

tion during the period under review.

carbon dioxide emissions by 4.3 million

tonnes. In terms of energy-efficiency

hours in projects financed by the corpora-

eight new projects related to renewable en-

ergy and energy efficiency during the pe-

riod. The facilities and financing schemes

sorting under the Nordic Environmental

Development Fund gave the green light

NEFCO’s Investment Fund approved

manager, aims to support the climate com-

mitments of the Norwegian state whilst

at the same time sustaining some level

of demand in the ailing carbon market

in parallel with the international nego-

tracting its targeted volume of 30 million

second Call for Proposals, seven projects

its procurement phase, successfully con-

a global portfolio of 17 projects. From the

tiations. In 2015, this facility concluded

certified emission reductions (CERs) from

were contracted in 2015, for a total vol-

Nigeria and South Africa.

to 19 new projects related to climate in-

vestments. The majority of these projects

district heating systems.

focused on energy-efficiency measures in

municipal buildings or modernisation of

rainaDH programme, five projects were

Within the framework of the DemoUk-

ume of some 11.5 million tonnes of carbon

In addition, the NEFCO Carbon Fund

savings from projects in Brazil, Malawi,

(NeCF), with Norwegian funding, was

completed during 2015. Project preparation

and implementation activities were in pro-

gress in another ten cities selected for the

implementation of demonstration projects

for improved district heating services. The

DemoUkrainaDH programme aims to sup-

opened up to projects in least developed

countries (LDC) and contracted three pro-

Republic of Congo, Ethiopia and Sudan for

a total of 788,000 CERs. In total, 3.5 million

in NorCaP and NeCF.

jects during the year in the Democratic

CERs were delivered from existing projects

ship Initiative (NPI) NAMA activity in Peru

was successfully concluded in the autumn

and Peru have agreed to continue their

al year of the Nordic Climate Facility (NCF)

The year 2015 was the fifth full operation-

2015, and the Nordic countries, NEFCO

co-operation during the period 2015-2018.

The first phase of the Nordic Partner-

NEFCO's climate

investments in

2015 reduced

carbon dioxide

emissions by

4.3 million tonnes.

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

since the funding instrument was launched

in late 2009. At the end of 2015, 60% of the

The total value of these projects was approxi-

from NCF amounted to EUR 20 million.

51 contracted NCF projects were completed.

mately EUR 34 million (including the co-

NEFCO’s activities during the year fo-

financing for the projects). Grant funding

cused on the day-to-day management of

NCF projects, the completion of the eval-

NCF’s fifth Call for Proposals and providing

cessful NCF5 applicants.

Asia and Latin America and promotes in-

local organisations in developing coun-

tries. NCF is financed by NDF. NEFCO man-

Call onwards.

NCF finances climate projects in Africa,

novative co-operation between Nordic and

ages the NCF1-NCF4 Calls whereas NDF

administrates NCF projects from the fifth

As regards policy assignments, NEFCO

uation of applications received through

support to the Nordic Development Fund

(NDF) in contract negotiations with suc-

were awarded UNFCCC’s Momentum for

Change initiative awards in 2015.

Three NCF-supported activities in Africa

continues to play its part in global climate

initiatives. During the year, NEFCO was

admitted to the Climate Technology Centre

UNFCCC Technology Mechanism; became

a Lead Partner in the Finance Initiative of

the Climate and Clean Air Coalition; and

COP21 meeting in Paris in December 2015.

and Network, the operational arm of the

had an active programme of events at the

NEFCO’s climate portfolio

in 2015 included several

investments related to the

production of biomass.

NEFCO 2015

PHOTO: PATRIK RASTENBERGER

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

The Baltic Sea

FOCUS AREA

The ecological state of the Baltic Sea

remains a key priority and focus area for

NEFCO’s investment portfolio. When as-

sessing NEFCO’s two main financial in-

struments, namely the Investment Fund

and the Nordic Environmental Develop-

2015. In addition, most agricultural pro-

jects financed by NEFCO during the period

ment Fund, approx. 17.4 per cent of the

investments related to water projects in

had a beneficial ecological impact on the

Baltic Sea thanks to reduced run-off of nu-

manure treatment or upgraded cultivation

practices in the Baltic Sea catchment area.

trients from fields as a result of improved

According to NEFCO’s environmental

status report, the corporation succeeded

in reducing discharges of phosphorus by

1,172 tonnes in 2015, which translates into

discharges of untreated wastewater from

approx. 1.8 million people. The correspond-

ing figure for nitrogen was 4,238 tonnes.

Fund, administered jointly by NEFCO and

the Nordic Investment Bank, eight BSAP

As regards the Baltic Sea Action Plan

projects were finalised during the year. In

December 2015, the fund was replenished

with SEK 12 million (approx. EUR 1.3 mil-

Water Management. The contribution gave

lion) by the Swedish Agency for Marine and

the fund a new lease of life and has enabled

NEFCO to roll out new projects benefiting

the Baltic Sea in 2016. All in all, since its

inception, the BSAP Fund has financed 38

projects ranging from wastewater treat-

porting alternative fuels in shipping, recy-

According

to NEFCO’s

environmental

status report, the

corporation suc-

ceeded in reducing

discharges of

phosphorus by

1,172 tonnes in 2015

ment and biogas projects to projects sup-

cling of nutrients and oxygenation of deep

nical assistance to projects that support

The BSAP fund provides grants for tech-

sea sediments, to mention a few examples.

the implementation of the HELCOM Baltic

Sea Action Plan (BSAP). The mandate of the

fund is to contribute to the realisation of

BSAP by providing co-financial support

for project development and implementa-

tion, e.g., in the agricultural, wastewater

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

CASE STUDY

Ukraine

Russia

Green shelter in

Cleaner water

for refugees in

Petrozavodsk

Antonivka

The upgraded drinking

In 2015, Finland pledged

water treatment plant in

EUR 3 million to the Nordic

Petrozavodsk, Russia, was

Energy Efficiency and

taken into full operation in

Humanitariana result of the

early 2015. As Support

Initiative. Anthe plant was

investment, earmarked

grant was used to construct

removed from the Barents

a new school buildinglist of

Euro-Arctic Council’s in

Antonivka in southern in

environmental hot spots

Ukraine. The Municipality of

November 2015. The second

Kherson covered the costs

leg of the project aims to

of expandingcity’swater and

upgrade the the waste-

sewage systems as well as

water treatment facilities.

the necessary groundwork.

The investment package,

The new school building

amounting to EUR 32

will rely on among other

million, will,energy-efficient

design and solar collectors.

things, introduce chemical

Some 440 pupils, many of

phosphorus removal. The

them refugees from eastern

upcoming measures are

Ukraine, willresult in from

expected to benefit an an-

the reduction of 60 tonnes

nualinvestment. The build-

ing will also be discharges

of phosphorus used as a

service centre, providing

into Lake Onega. NEFCO

psychologicala EUR 4 mil-

has provided support to

refugees for the project.

lion loan living in the area.

NEFCO 2015

PHOTO: IRINA NAZAROVA

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

CASE STUDY

Ukraine

Green shelter

for refugees in

Antonivka

In 2015, Finland pledged

EUR 3 million to the Nordic

Energy Efficiency and

Humanitarian Support

Initiative. An earmarked

grant was used to construct

a new school building in

Antonivka in southern

Ukraine. The Municipality of

Kherson covered the costs

of expanding the water and

sewage systems as well as

the necessary groundwork.

The new school building

will rely on energy-efficient

design and solar collectors.

Some 440 pupils, many of

them refugees from eastern

Ukraine, will benefit from

the investment. The build-

ing will also be used as a

service centre, providing

psychological support to

refugees living in the area.

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

PHOTO: PATRIK RASTENBERGER

or hazardous waste sectors. A key purpose

of the fund is to facilitate and speed up the

preparation of bankable projects in the Bal-

include both public and private entities.

tic Sea catchment area. Recipients eligible

for financing through the BSAP Trust Fund

pilot projects related to thin layer dredging

In August 2015, one of the BSAP Fund’s

treatment projects in the Baltic Sea catch-

ment area. Through its investments, NDEP

which corresponds to the annual discharg-

in the waters sector in 2015, significant

has contributed to the annual reduction of

phosphorus discharges by 2,300 tonnes,

es from a city with 3.5 million inhabitants.

When assessing NEFCO’s investments

progress was noted in Gatchina and Petro-

water treatment plant in Petrozavodsk was

taken into full operation in early 2015. As

Council’s list of environmental hot spots

and the removal of eutrophicated organic

matter from lake bottoms received wide-

Barnapasjön close to Jönköping in Sweden

spread media attention. The project in Lake

resulted in doubled oxygen levels and re-

duced eutrophication. The project serves

of the Baltic Sea.

as validation of a test rig for the retrieval

NEFCO’s chairmanship of the North-

of sediments from the oxygen-free areas

ern Dimension Environmental Partnership

2015. NDEP co-ordinates environmental

mension area of Northwest Russia and

development projects in the northern di-

Northern Belarus. The NDEP Support Fund

is a multi-donor fund that became opera-

Union, the Russian Federation, Belarus,

the Netherlands and Belgium. NDEP has

tional in 2002 and is made up of contribu-

tions and donations from the European

Finland, Sweden, Denmark, Norway, Cana-

so far provided funding for 15 wastewater

da, France, the United Kingdom, Germany,

zavodsk in Russia. The upgraded drinking

a result of the investment, the plant was

removed from the Barents Euro-Arctic

in November 2015. The second leg of the

project aims to upgrade the city’s waste-

water treatment facilities. The upcoming

measures are expected to result in an an-

discharges into Lake Onega, which belongs

to the Baltic Sea catchment area.

(NDEP) continued until the end of June

nual reduction of 60 tonnes of phosphorus

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Green growth

FOCUS AREA

Green growth has been set as

a common

strategic goal for the future by the Nordic

lenges, while at the same time strength-

countries in order to effectively address

climate change and related global chal-

ening international competitiveness and

through its Cleaner Production Facility for

over 20 years. Through its climate funds

projects on a global scale.

Over the years, the Board of Directors

and Nopef, the corporation today finances

has prioritised NEFCO’s work with green

growth, and it was therefore decided to

celebrate NEFCO’s 25th anniversary with

a seminar focusing on Nordic cleantech

April 2016.

and green growth solutions. The seminar

A new report A

Nordic perspective on green

Fostering green growth

was held in Oslo in

growth

was published in connection with

the seminar. The report stated that the

tion and consumption processes that

natural resources and on minimising

securing sustainable economic growth in

green growth as one of its main focus areas

during the year as the new strategy was

approved by the Board of Directors.

In addition to the direct effects of cli-

the Nordic region. NEFCO has also adopted

mate change, some of the global challenges

that will have wide-ranging socioeconomic

effects in years to come include population

growth, demographic changes, increased

urbanisation, water and resource scarcity,

demands set by these changes in order to

maintain the conditions for sustainable

economic development and growth.

and deforestation. Green growth can be

seen as a response to the requirements and

development of green growth will entail

a target-oriented shift towards produc-

are based on effective usage of available

waste, pollution and climate emissions.

Furthermore, it highlights that key ar-

eas in this development will include

resource-efficient products, housing and

new solutions for cleaner energy, en-

production and other sectors, highlight-

ing growth through green technology

and solutions since the 1990s, although

the concept itself was first introduced in

2005 in Seoul at a ministerial conference

ready financed cleaner industrial processes

NEFCO has been working with cleaner

vironmentally friendly transportation,

infrastructure as well as improved water

supply and treatment processes, all sec-

emission reductions globally and reduced

discharges into the Baltic Sea.

tors that NEFCO has been working with

since its establishment to contribute to

Many of NEFCO’s customers are devel-

regarding development and the environ-

ment. In Eastern Europe, NEFCO has al-

oping green innovations and solutions in

several areas and sectors, such as wind

power, geothermal energy, biofuels, heat-

and industrial processes. Support and ex-

isting financial mechanisms are crucial,

ing systems, energy-efficient buildings

however, for Nordic small and medium-

sized companies (SMEs) to be able to in-

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

vest in research and product development.

supporting green technology.

Today, NEFCO supports, for example, a

NEFCO has several financing schemes

range of Nordic SMEs aiming for interna-

foreign market. Foreign establishments

solutions to new markets.

enable growth for Nordic companies but

also transfer of knowledge of Nordic green

During 2015, NEFCO attended several

tionalisation through the Nordic Project

Fund (Nopef ). Last year, the facility ap-

Being able to support these SMEs with

phase is often crucial to the companies’

proved financing for 73 new Nordic SMEs.

grant financing for the feasibility study

ability to establish foreign business set-

ups on new markets, such as subsidiar-

often needed to be able to operate on a

ies or joint ventures. A local presence is

events and seminars highlighting green

solutions and innovations to meet new

clients. In October, NEFCO participated in

the biggest Cleantech event in the Nordics,

Cleantech Venture Day

in Lahti, and in No-

vember NEFCO participated in the match-

making event named Slush gathering over

ever, is carried out continuously.

15,000 entrepreneurs. Co-operation with

the Nordic Cleantech organisations, how-

The usage of environmentally

sound technology reduces

the consumption of energy

and natural resources.

NEFCO 2015

PHOTO: JONAS HÄGGBLOM

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

The Arctic

FOCUS AREA

NEFCO’s environmental work

in the Arctic

region continued to make progress through

2015. The Arctic Council Support Instru-

ment (PSI) was strengthened by the final

deposit of the Russian Federation’s allo-

cation of EUR 10 million. The PSI fund is

supported by Finland, Iceland, NEFCO, Nor-

way, the Russian Federation, the Sámi Par-

2015 stood at EUR 15.9 million. Eight of the

twelve Arctic Council projects benefitting

liament, Sweden and the United States of

America. The PSI pledges as of 31 December

from PSI financing had been completed or

PSI, is augmented by the Swedish Envi-

Fund, which is also under its administra-

tion. The purpose of the Swedish EPA Trust

NEFCO’s Arctic focus, in addition to

ronmental Protection Agency (EPA) Trust

Fund (STF) with NEFCO is to contribute

to the funding of projects that mitigate

climate pollutants, such as Short Lived

hydrofluorocarbons (HFC), tropospheric

ozone; ozone-depleting substances (ODS);

heavy metals (e.g. mercury); and persistent

Climate Pollutants, black carbon, methane,

were near completion by the end of 2016.

The completed projects address mostly miti-

carried out in co-operation with the Arctic

nants (ACAP) and its Expert Group on Short

Lived Climate Pollutants (SLCP).

gation of black carbon, and they have been

Council Working Group on Arctic Contami-

Work progressed to address a pipeline

organic pollutants (POPs), including di-

oxins, furans and obsolete pesticides that

deposit in or otherwise affect the Arctic.

Three STF-financed initiatives were final-

ised during 2015 and early 2016 covering:

i) agricultural open burning and mitiga-

tion of black carbon from the sector; ii)

reduction opportunities from flaring in

the Russian Arctic and preparatory work

for mitigation of methane and black car-

bon from flaring in the oil and gas sector;

identification of black carbon emission

of about thirty projects covering manage-

ment of hazardous wastes, mitigation of

mercury and SLCPs. The total cost of the

pipeline is estimated at about EUR 58 mil-

lion. Total PSI allocations up to 31 Decem-

ber 2015 amounted to EUR 2.28 million.

PSI Committee (PCOM) -- including deci-

PSI Committee (PCOM) in October 2015 --

ment 12 approved Arctic Council Projects.

sions made at the Fourth Meeting of the

have committed EUR 1.72 million to imple-

Final Investment Decisions (FIDs) from the

and iii) addressing information exchange

on mitigation of mercury through a work-

on mercury abatement in the metallurgi-

PBI Research Institute (Finland) and JSC

tion) in Ekaterinburg.

shop on technical information exchange

cal industry. The information exchange

was carried out in co-operation with the

Uralmekhanobr (UMBR, Russian Federa-

Co-operation in the Barents Region

The Arctic work is closely related to the

work in the Barents Euro-Arctic regions,

which for NEFCO’s part largely focuses on

the so-called Barents Environmental ‘hot

spots’ that constitute key environmental

challenges in the European part of the Rus-

sian Arctic. In November 2015, the Minis-

ters of Environment of the Barents coun-

one ‘hot spot’ in full and two ‘hot spots’

partially from the list:

NEFCO 2015

tries met in Sortavala in Russian Karelia,

where the Ministers decided to exclude

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

● K-4 in full: ‘Drinking Water in Petroza-

vodsk’ to which NEFCO has made impor-

tant contributions for project develop-

ment as well as financing the implemen-

partners (Finland, NDEP and NIB)

the ‘hot spots’, for instance by co-funding

retariat in Kirkenes, Norway.

an adviser for Climate, Environment and

Hot Spots at the International Barents Sec-

One example of cross-pollination at pro-

tation together with its international

● A3-2 partially: ‘Severodvinsk Heat and

● Ko3-1 partially: ‘Mondi Pulp and Paper

This means that of the original 42 ‘hot

whereof two are already partially resolved.

Mill’ (in Syktyvkar, Komi)

spots’ defined in 2003, 35 now remain,

Several others have also shown consider-

and other funds at NEFCO. NEFCO also

able progress, many of them with support

from the Barents Hot Spots Facility (BHSF)

provides general support to the work on

Power Plant No. 2’

ject level between the Arctic and Barents

spheres is an initiative in the Archangel

Region with the regional operator Arch-

OblEnergo (AOE), targeting diesel power

stations in the Dolgoshcheliye and Leshu-

konskoye off-grid communities with pilot/

pensation. This joint effort has its roots in

the Barents co-operation. A feasibility study

demonstration solutions for solar power,

wood gasification and reactive power com-

was carried out in 2015 that will be contin-

ued as a PSI-funded project in 2016 as an

Arctic Black Carbon demonstration project.

The Arctic Council Support

Instrument aims at mitigating

the emissions of black carbon

and other environmentally

harmful pollutants.

NEFCO 2015

PHOTO: JONAS HÄGGBLOM

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Report from

the Board of

Directors 2015

Over the year, the operating countries

for the corporation’s investment activities

have increased, which means that NEFCO

can once again review relevant environ-

and Poland. In Belarus, the status agree-

ment with NEFCO came into force, which

ipate in communal investments. Currently

mental investments in the Baltic countries

means that the corporation now can partic-

an investment is being reviewed in respect

Baltic drainage basin. In addition, NEFCO

of wastewater treatment in five cities in the

was able to introduce project activities in

both Georgia and Moldavia. With increased

to spread and thereby reduce business in-

vestment risks.

NEFCO has most of its investment activ-

countries of operation, NEFCO is better able

The situations in the countries where

A total of 165 new

projects were

approved during

the year to the

value of EUR 107.8

million.

ities - Russia and Ukraine - is still prob-

makes the development in Russia of some

economy and - at the end of the year - its

cessfully stabilized its currency and despite

lematic. Sanctions and a reduced oil price

concern, whilst the investment climate in

Ukraine is impacted by the country’s weak

unsure political insecurity. On a positive

note, the Ukraine government has suc-

strong driving force to reduce energy con-

that NEFCO has identified and approved

over the year.

the weak economy in Ukraine, there is a

sumption in the country, which has meant

a number of communal energy projects

CO’s project activities. Within all funds

managed by the corporation, a total of 165

new projects were approved during the

year to the total value of EUR 107.8 million.

2015 was another active year for NEF-

Within the Investment Fund, NEFCO’s au-

thorised capital, new investments of a total

EUR 30.4 million were approved and new

preliminarily approved projects amounted

Fund, the corporation had at the end of

to EUR 25.1 million. Within the Investment

2015 a total of 55 active projects, where com-

mitments amounted to EUR 159.8 million.

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

CASE STUDY

Belarus

Saving energy

at a brickworks

in Vitebsk

OJSC Keramika manufac-

tures bricks and drainage

pipes for the construction

industry in Belarus and Rus-

sia. In 2015, the company

invested in its electricity

production using a loan

from NEFCO’s Facility for

Cleaner Production. The

investment has enabled a

modernisation of the ven-

tilation system and the in-

stallation of a new gas-fired

cogeneration plant and

two hot water boilers. With

these measures, Keramika

has avoided a procurement

of grid electricity of 7,538

megawatt-hours per year,

which in turn has gener-

ated savings and reduced

emissions of carbon dioxide,

nitrogen oxides, carbon

monoxide and volatile

organic compounds.

NEFCO 2015

PHOTO: PATRIK RASTENBERGER

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Disbursements are made with a certain

At the end of 2015,

NEFCO’s fund

management

amounted to a

total value of

EUR 345 million.

delay and thus a greater part of NEFCO’s

resources are allocated than appear in the

corporation's Report on Financial Position.

NEFCO’s authorised capital, the Invest-

ment Fund, NEFCO also manages a num-

and investors. NEFCO also functions as an

Implementing Agency

for a number of projects

In addition to the projects financed with

ber of other funds, not only for their own-

ers, but also for non-Nordic contributors

in large funds, such as the Eastern Europe

Energy Efficiency and Environment Part-

Environmental Partnership (NDEP).

nership (E5P) and the Northern Dimension

during the year. The new funds are a Swed-

of energy in Ukraine, a Danish initiative to

Five new funds have been established

ish initiative to investigate the opportuni-

support energy efficiency and sustainable

ties of using household waste as a source

energy in Georgia, two Finnish initiatives

within the

Nordic Initiative for Urgent Human-

fund and a further Norwegian initiative

addition, NEFCO gained a new assign-

itarian and Energy Efficiency Efforts in Ukraine

to support the Ukrainian gas reform. In

ment from the Ministry of Climate and

Environment to assist in the evaluation

to contract for.

At the end of 2015, NEFCO’s fund man-

of climate projects that Norway intends

agement amounted to a total value of

EUR 345 million. Within these funds, fi-

nancing has been granted to a total of over

600 small and medium-sized private and

public projects spread across different sec-

Latin America.

tors in over 60 countries, of which around

200 projects are located in Africa, Asia and

within fund management, NEFCO success-

fully passed the European Commission’s

Pillar Assessment

in 2015 (all seven pillars).

partner in the EU-financed

Neighbourhood

As a confirmation of the high standard

NEFCO is now in the process of being made

Investment Facility

(NIF) with the capacity

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

to propose projects and programs as

Lead

Finance Institution.

the opportunities to increase the synergy

effects between investment activities and

funding assignments.

Both the activities’ financial and envi-

For the moment, NEFCO is evaluating

Staﬀ

At the end of 2015, 34 persons worked di-

Ukraine. There are also advisers who work

for NEFCO on a consultancy basis.

Result

The annual accounts show a profit of

EUR 1,050,403.25. In accordance with

previous practice, the Board of Directors

business as retained earnings.

proposes that the profit be returned to the

rectly for NEFCO, four of whom are em-

ployed at the representation office in Kiev,

ronmental results were in line with the

expectations. The high risk within the

countries of operation and the low in-

in recent years, show a relatively modest

are presented in the appendix.

eﬀects of the projects

In accordance with the procedure that

has been gradually developed at NEFCO,

each project is evaluated with regard to

its environmental effects. The expected

terest rate mean that the operations, as

result. Details of the environmental result

Evaluation of the environmental

This is a shortened

version of the Report of

the Board of Directors.

The full report is available

at www.nefco.org/

news-media/publications-

reports/annual-reports

Helsinki, 3 March 2016

environmental effects are analysed be-

financing is taken, and when the project

has been completed, NEFCO follows up

the real effects. The projects of both the

Investment Fund and the Environmental

Development Fund (details on the funds

are presented below) show on average

positive environmental effects at the ex-

Søren Bukh Svenningsen

Chair

fore a decision on participation in the

Ann-Britt Ylinen

Vice Chair

pected level. Of the 81 active projects that

have been analysed, 11 are classified as

tal expectations, 25 are at the expected

level, 16 do not yet meet expectations

be drawn. Of all analysed projects, 237

assessment is attached.

projects that have exceeded environmen-

and in 29 cases no conclusions can yet

have been completed. A summary of the

the environmental cost efficiency of the

projects in relation to costs in the Nordic

countries in order to achieve corresponding

emission reductions. On average, the cost

of emission reductions in NEFCO’s projects

sponding costs in the Nordic countries.

is approximately one eighth of the corre-

NEFCO also systematically assesses

Harald Rensvik

Jessica Andersson

Danfríður Skarphéðinsdóttir

Magnus Rystedt

Director

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Environmental

status report

2015

The main aim of NEFCO’s business op-

erations

is to contribute to a reduction

in environmentally harmful pollutants

originating from various sources, mainly in

of the environment in the Nordic Region.

Eastern Europe. Priority is given to projects

which have a major impact on the state

support, it first assesses their expected

When NEFCO considers projects for

environmental benefits to ensure that pro-

environment are given priority. In princi-

jects with direct and clear benefits to the

ple, any measures that can help to reduce

advanced industrial processes, recircula-

tion of raw materials or improved treat-

ment of wastewater or energy efficiency

measures, are eligible. NEFCO’s evaluation

tionship between the investment and its

is also based on an analysis of the rela-

the burden on the environment, such as

Considerable

progress with

wastewater

projects financed

by NEFCO was

achieved in the

Kaliningrad and

Leningrad Regions,

in Russia as well

as in Belarus.

anticipated quantitative effects in order to

identify the projects that are environmen-

tally most cost-effective.

takes into account projects in which its

projects in which NEFCO is no longer in-

volved is that the relevant facilities have

NEFCO’s environmental database also

involvement has ceased. The justification

for including emission reductions from

been found, in post-evaluation, to match

or even significantly exceed expected re-

facility is substantially longer than the re-

the positive environmental effect of the

a linear fashion for a long time into the

future.

facility will in all likelihood continue in

As regards the emission reductions ob-

ductions. The service life of an industrial

payment period of a loan, and, as a result,

tained through NEFCO’s investments in

2015 compared with the overall result in

The result for reductions of CO2 emissions

for 2015 is somewhat weaker than the re-

that emission reductions have decreased

somewhat in projects financed by NEFCO’s

NEFCO 2015

2014, no dramatic changes can be noted.

sult for 2014, which has to do with the fact

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Investment Fund. Both the direct and the

fallen during the period under review. The

fuel boilers over ten years old are no longer

included in the reporting.

indirect reductions of CO2 emissions have

lower reduction of indirect CO2 emissions

seen in Figure 1 is due to the fact that bio-

charges of biochemical oxygen demand

(BOD), phosphorus and nitrogen to water.

efforts to achieve the objectives defined

NEFCO’s work in 2015 mainly focused on

in the Baltic Marine Environment Com-

mission’s Baltic Sea Action Plan (BSAP).

projects financed by NEFCO was achieved

in particular in Gatchina in Russia as well

as in Belarus.

umes of wastewater flows and the level of

concerned, priority was given to projects

Sea. The positive effects that are being pri-

oritised are acceptable quality of drink-

connection and, above all, reduced dis-

As far as NEFCO’s water investments are

Considerable progress with wastewater

in the Kaliningrad and Leningrad Regions,

The significant differences in the vol-

that reduce the discharges of nutrients

feeding the eutrophication in the Baltic

ing water, an increased degree of sewage

discharged phosphorus and nitrogen are

due to the fact that the discharges from a

Figure 1

BOD Biochemical oxygen demand

CO2 Carbon Dioxide

MWh Megawatt hours

Nox Nitrogen oxides

Ntot Nitrogen total

Ptot Phosphorus total

SO2 Sulphur oxides

SS Suspended solids

VOC Volatile organic compounds

t/y Tonnes per year

Figure 1

NEFCO: Total reductions

2014

2015

BOD

t/y

CO₂

t/y

CO₂

ind. t/y

Dust

t/y

Energy

MWh/y

t/y

Ntot

t/y

Ntot

agric. t/y

Other

t/y

Ptot

t/y

Ptot

Resource

agric. t/y

t/y

SO₂

t/y

SO₂

ind. t/y

t/y

Waste Waste

t/y

water t/y

VOC

t/y

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

key client are missing in the report from

2014. The figures would otherwise be at

about the same level for 2014 and 2015. As

Southwest Wastewater Treatment Plant

in the previous years, the impact of the

in St. Petersburg was excluded from the

2015 figures because of the dominant posi-

tion of the facility in terms of the volume

The water sector has largely continued to

the decline.

of wastewater treated (80 million m3).

progress well during 2015, but its impor-

tance in NEFCO’s project portfolio is on

NEFCO’s carbon investments

In 2015, the NEFCO Norwegian Carbon

Procurement Facility (NorCaP) concluded

tracting its targeted volume of 30 million

its procurement phase, successfully con-

certified emission reductions (CERs) from

a global portfolio of 17 projects. From the

second Call for Proposals, 7 projects were

contracted in 2015 for a total volume of

and South Africa.

some 11.5 million tonnes of carbon savings

Policy work

The work aimed at harmonising the ac-

counting of greenhouse gas emissions at

project level continued in close co-oper-

view. Moreover, NEFCO’s environmental

unit participated in meetings hosted by

ation with other international financial

institutions during the period under re-

the Working Group on Environment for

Multilateral Financial Institutions in order

to promote the Working Group’s attempts

institutions.

to harmonise the environmental meth-

odology applied at international financial

events related to the Baltic Sea, priority

was given to attendance at HELCOM’s and

the EU’s stakeholder events and confer-

ences focusing on innovative approaches

participated in, among others, the EUSBSR

dance of pharmaceuticals in wastewater

that was held in Stockholm, Sweden.

to addressing reduced discharges of envi-

ronmentally harmful substances. NEFCO

Annual Forum in Jūrmala, Latvia, and the

EU’s Stakeholder Conference on the abun-

As regards NEFCO’s participation in

from projects in Brazil, Malawi, Nigeria

(NeCF), with Norwegian funding, was

In addition, the NEFCO Carbon Fund

opened up to projects in least developed

jects during the year in the Democratic

countries (LDC) and contracted three pro-

Republic of Congo, Ethiopia and Sudan for

CERs were delivered from existing pro-

of the Nordic Partnership Initiative (NPI)

NAMA activity in Peru was successfully

concluded in autumn 2015, and the Nordic

period 2015-2018.

countries, NEFCO and Peru have agreed

jects in NorCaP and NeCF. The first phase

a total of 788,000 CERs. In total, 3.5 million

to continue their cooperation during the

In 2015, the NEFCO

Norwegian Carbon

Procurement Facility

concluded its pro-

curement phase,

successfully contract-

ing its targeted

volume of 30 million

certified emission

reductions.

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Examples

of emission

reductions

in 2015

NEFCO IN NUMBERS

CO2

4.3 million tonnes

1.97 million persons

travelling from Oslo to

New York and back

by aircraft

SOx

2,757 tonnes

10 % of Sweden’s

total SO2 emissions

in 2012

Symbols: “Faucet”

by Kenneth Von Alt,

“Lightning“ by Ryan

Oksenhorn from

thenounproject.com

collection.

1,172 tonnes

Untreated waste-

water from

1.73 million people

(equals Copenhagen

and Malmö)

NEFCO 2015

Energy reduction

13 900 GWh

41% of Denmark’s

total electricity

consumption

in 2014

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Statement of

comprehensive

income

1 January - 31 December

(Amounts in EUR)

2015

2014

Income

Interest income, placements with

credit institutions

Interest income, debt securities

Interest income, lending

Net result of financial operations

Other income

Total income

350,670

82,510

2,694,771

-631,923

4,551,702

7,047,730

586,583

81,844

2,446,025

435,788

4,457,558

8,007,797

Operating expenses

Administrative expenses

Depreciation and write-down in value

of tangible and intangible assets

Foreign exchange gains and losses

Impairment of loans / reversals

Total operating expenses

5,762,254

27,944

318,222

-111,094

5,997,326

6,012,532

15,037

1,593,009

387,219

8,007,797

RESULT FOR THE YEAR

TOTAL COMPREHENSIVE INCOME

1,050,403

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Statement

of financial

position

31 December

(Amounts in EUR)

2015

2014

ASSETS

Cash and cash equivalents

Placements with credit institutions

Total, cash and cash equivalents and

placements with credit institutions

2,748,672

82,572,702

85,321,374

3,251,257

86,949,216

90,200,473

Debt securities

Investment assets

Other placements

Loans outstanding

Other receivables

Accrued interest

Intangible assets

Tangible assets

TOTAL ASSETS

10,206,336

14,786,544

3,571,579

42,399,697

309,194

772,252

8,950

50,725

157,426,650

10,123,969

15,417,324

3,627,224

34,329,160

1,671,312

908,254

10,616

56,155

156,344,485

LIABILITIES AND EQUITY

Liabilities

Other liabilities

Equity

Paid-in capital

Reserve for investment/credit losses

Operational fund

Retained earnings

Result for the year

Total equity

113,406,560

24,557,177

4,500,000

13,150,650

1,050,403

156,664,790

113,406,560

24,557,177

4,500,000

13,150,650

155,614,387

761,860

730,099

TOTAL LIABILITIES AND EQUITY

157,426,650

156,344,485

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Changes in

equity

Result for the year

Reserve for

investment/credit

losses

Retained earnings

Operational fund

Paid-in capital

Total

155,614,387

113,406,560

24,557,177

4,500,000

13,150,650

155,614,387

1,050,403

113,406,560

24,557,177

4,500,000

13,150,650

1,050, 403

1,050,403

156,664,790

2014

(Amounts in EUR)

Equity as of 1 January 2014

Appropriation to the retained earnings

Appropriation to the reserve for

investment/credit losses

Appropriation to the Operational fund

Paid-in capital

Result for the year

Equity as of 31 December 2014

113,406,560

24,557,177

4,500,000

12,516,210

634,440

-634,440

Equity as of 1 January 2015

Appropriation to the retained earnings

Appropriation to the reserve for investment/

credit losses

Appropriation to the Operational fund

Paid-in capital

Result for the year

Equity as of 31 December 2015

113,406,560

24,557,177

4,500,000

13,150,650

Proposed allocation of the year’s result:

2015

Appropriation to the retained earnings

RESULT FOR THE YEAR

1,050,403

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Cash flow

statement

1 January - 31 December

(Amounts in EUR)

2015

2014

Cash flows from operating activities

Result for the year

Depreciation and write-down in value of tangible and

intangible assets

Value adjustments, investment assets

Value adjustments, other placements

Capital adjustments, other placements

Impairments, lending

Change in accrued interests

Lending

Disbursements

Repayments

Premature repayments

Realised credit losses

Capitalisations

Exchange rate adjustments

Change in investment assets

Cash flows from operating activities

-11,936,823

3,549,479

1,241,826

-249,550

254,782

-45,000

-7,612,200

-13,334,080

4,198,778

2,460,818

2,306,567

642,170

-3,191,433

1,050,403

27,944

675,780

-1,020,651

55,644

-1,352,919

136,885

15,037

389,323

22,524

59,427

387,219

-339,215

Cash flows from investing activities

Change in placements with credit institutions

Change in debt securities

Change in other placements

Change in other receivables and liabilities, net

Change in tangible and intangible assets

Net cash flows from investing activities

4,376,514

-82,367

1,020,651

1,815,665

-20,847

7,109,615

2,492,197

-81,702

-525

-1,239,489

-57,085

1,113,396

Change in cash and cash equivalents

-502,585

-2,078,037

Opening balance for cash and cash equivalents

Closing balance for cash and cash equivalents

The cash flow statement has been

prepared using the indirect method

and cash flow items cannot be directly

concluded from the statements of

financial positions.

3,251,257

2,748,672

5,329,295

3,251,257

Additional information to the statement of cash flows

Interest income received

3,263,952

2,775,141

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Independent

Auditors’

Report

Independent auditors’ report on the

financial statements

In our capacity as auditors appointed by

the Control Committee of the Nordic En-

vironment Finance Corporation we have

evant to the entity’s preparation and fair

presentation of the financial statements in

order to design audit procedures that are

appropriate in the circumstances, but not

for the purpose of expressing an opinion

on the effectiveness of the entity’s internal

the appropriateness of accounting policies

used and the reasonableness of accounting

evaluating the overall presentation of the

financial statements.

We believe that the audit evidence we

control. An audit also includes evaluating

estimates made by management, as well as

audited the accompanying financial state-

the statement of financial position as at 31

ments of the Corporation, which comprise

December 2015, and the statement of com-

prehensive income, statement of changes

in equity and statement of cash flows for

the year then ended, and a summary of

significant accounting policies and other

explanatory notes.

have obtained is sufficient and appropriate

to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements

give a true and fair view of the financial po-

sition of the Nordic Environment Finance

Corporation as of 31 December 2015, and

flows for the year then ended in accordance

Accounting Standards Board.

of its financial performance and its cash

with International Financial Reporting

Standards as issued by the International

Report on the other requirements

In accordance with the Terms of Engage-

ment our audit also included a review of

whether the Board of Directors’ and the

Managing Director’s administration have

complied with the Statutes of the Corpora-

tion. It is our opinion that the administra-

of the Corporation.

The Board of Directors’ and the

Managing Director’s responsibility for

the financial statements

The Board of Directors and the Managing Di-

fair view in accordance with International

rector are responsible for the preparation of

the financial statements that give a true and

Financial Reporting Standards, and for such

internal control as they determine is neces-

statements that are free from material mis-

statement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion

our audit. We conducted our audit in ac-

cordance with International Standards on

Auditing. Those standards require that we

able assurance whether the financial state-

on these financial statements based on

sary to enable the preparation of financial

comply with ethical requirements and plan

and perform the audit to obtain reason-

ments are free from material misstatement.

and disclosures in the financial statements.

This document is an

English translation of

the Auditors' report

in Swedish. Only the

Swedish version of the

report is legally binding.

tion of the Board of Directors and the Man-

aging Director complied with the Statutes

Helsinki, 3 March 2016

Sixten Nyman

KPMG Oy Ab

Authorised Public Accountant

Hans Åkervall

KPMG AB

to obtain audit evidence about the amounts

An audit involves performing procedures

The procedures selected depend on the au-

ditor’s judgment, including the assessment

financial statements, whether due to fraud

of the risks of material misstatement of the

or error. In making those risk assessments,

the auditor consid

ers internal control rel-

Authorised Public Accountant

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Statement by

the Control

Committee

Statement by the Control Committee of the

Nordic Environment Finance Corporation

onthe audit of the ad

To the Nordic Council of Ministers

In accordance with section 9 of the statutes

of the Nordic Environment Finance Corpo-

Following the audit performed, we note

that:

● the Corporation’s operations during the

accordance with the Statutes, and that

financial year have been conducted in

fair view of the financial position of the

Corporation as at 31 December 2015 and

of its results and cash flows for the year

1.050.403,25.

Ministers that:

then ended. The Statement of Compre-

hensive Income shows a result of EUR

We recommend to the Nordic Council of

● the result for the financial year be treat-

come and the Statement of Financial

Position be adopted, and

Director be discharged from liability for

riod examined by us.

ed as proposed by the Board of Directors,

● the financial statements give a true and

ration, we have been appointed to ensure

and to bear responsibility for the audit of

the Corporation. Having completed our

assignment for the year 2015, we hereby

submit the following report.

that the operations of the Corporation are

conducted in accordance with the Statutes

financial year as well as after the Corpo-

trol and examination measures were per-

The Control Committee met during the

ration’s financial statements had been

prepared, whereupon the necessary con-

formed. The Corporation’s Annual Report

March 2016, at which time we also received

2016 by the authorised public accountants

appointed by the Control Committee.

● the Statement of Comprehensive In-

was examined at a meeting in Helsinki on 3

the Auditor’s Report submitted on 3 March

● the Board of Directors and Managing

the administration of the Corporation’s

operations during the accounting pe-

Helsinki, 3 March 2016

Bill Fransson

Karin Gaardsted

Penilla Gunther

Arto Pirttilahti

Michael Tetzschner

Höskuldur Þórhallsson

This document is an English

translation of the Control

Committee's statement in

Swedish. Only the Swedish

version of the statement is

legally binding.

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Approved

projects

2015

NEFCO INVESTMENT

FUND - (IF)

INVESTMENTS (9)

Ukraine

Biogas production and en-

ergy efficiency measures at

a pig farm (Denmark)

Russia

Production of pellets for en-

ergy production (Sweden)

Ukraine

Energy efficiency measures

in municipal buildings in

Chernivtsi (E5P/Sweden/

Nordic deliveries)

Ukraine

Energy efficiency measures

in municipal buildings in

Ivano-Frankivsk (E5P/Swe-

den/Nordic deliveries)

Russia

Energy efficiency measures

in municipal buildings in

Murmansk (Norway)

Georgia

Leasing of environmentally

friendly vehicles (Nordic

delivery)

Belarus

Modernisation of the

district heating system in

Minsk (Sweden/NDEP)

Ukraine

Modernisation of the

wastewater treatment

plant in Lviv (E5P/EBRD/

Sweden/Finland)

Moldova

Modernisation of manure

management at a pig farm

(Denmark)

ADDITIONAL

INVESTMENTS (1)

Ukraine

Production of water-borne

paint (Sweden)

Georgia

Consultancy services

related to hydropower

(Iceland)

Georgia

Leasing of environmentally

friendly vehicles (Nordic

delivery)

Russia

Energy efficiency measures

in municipal buildings in

Murmansk (Norway)

Ukraine

Energy efficiency measures

in municipal buildings in

Cherkassy (Sweden/E5P)

Belarus

Loan programme for envi-

ronmental projects in the

agricultural sector (Nordic

deliveries)

Ukraine

Modernisation of a hydro-

power plant (Sweden)

EXPRESSIONS OF

INTEREST (12)

Russia

Production of pellets for en-

ergy production (Sweden)

Ukraine

Conversion of gas-fuelled

heating boilers to boiler us-

ing biomass (Sweden)

Belarus

Modernisation of pig farm

(Denmark)

Moldova

Modernisation of manure

management at a pig farm

(Denmark)

Ukraine

Production and sales

of heat and electricity

produced from biomass

(Denmark)

Ukraine

Production and sales of

heat produced from bio-

mass (Denmark)

SINO-NORDIC

ENVIRONMENTAL

PROTECTION CO-OPER-

ATION PROGRAMME IN

CHINA - SNEPCO (1)

Investments in industrial

energy efficiency meas-

ures through GreenStream

(Finland)

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

NORDIC ENVIRONMEN-

TAL DEVELOPMENT

FUND (NMF)

INVESTMENTS (2)

Ukraine

Allocation of funds to the

Nordic Energy Efficiency

and Humanitarian Support

Initiative Fund

Belarus

Support for project prepa-

ration and evaluation for

the Facility for Energy Sav-

ing Credits and the Facility

for Cleaner Production

INVESTMENT FUND

Distribution by sector

Ukraine

Energy efficiency measures

at a farm in Severynovka

Ukraine

Energy efficiency measures

at a factory producing insu-

lation material

Ukraine

Replacement of fossil fuels

with renewable energy in

the district heating system

in Ternopil

Ukraine

Energy efficiency measures

in municipal buildings and

modernisation of the street

light system in Kremen-

chuk

Ukraine

Energy efficiency meas-

ures in school buildings in

Cherkasy

Ukraine

Energy efficiency measures

in Sumy

Ukraine

Modernisation of the heat

supply system in a day-care

centre in Sambir

Ukraine

Energy efficiency measures

in three school buildings in

Rivne

Ukraine

Insulation measures at a

day-care centre in Korosten

NMF ADDITIONAL

INVESTMENTS (1)

Belarus/Ukraine

Support for the implemen-

tation of municipal energy

efficiency projects

Energy 36.1 %

Industry 35.6 %

Water 20.7 %

Agriculture 5.5 %

Waste 2.2 %

Ukraine

Upgrading of the district

heating system in Cher-

nivitsi

Ukraine

Upgrading of the district

heating system in Konotop

Distribution by country

APPROVED ENERGY

SAVINGS CREDITS

PROJECTS - (ESC) (11)

Ukraine

Modernisation of the street

light system in Chernivtsi

Ukraine

Modernisation of the street

light system in Berdychiv

Russia 39.4 %

Ukraine 23.7 %

Estonia, Latvia, Lithuania 20.0 %

Poland 8.4 %

Belarus 5.8 %

Georgia/Moldova 1.9 %

Slovakia & Czech Rep. 0.8 %

Ukraine

Modernisation of the street

light system in Komsomolsk

Ukraine

Modernisation of the street

light system in Kolomyia

Ukraine

Energy efficiency measures

in municipal buildings and

modernisation of the street

light system in Kamianets-

Podilskyi

APPROVED CLEANER

PRODUCTION FACILITY

PROJECTS - (CPF) (9)

Ukraine

Modernisation of the water

supply and drainage sys-

tems in Lutsk

Ukraine

Modernisation of heat

supply at an agricultural

company

Ukraine

Improvement of the han-

dling of slurry and the heat-

ing solutions at a pig farm

Belarus

Modernisation of equip-

ment used for producing

wood chips

ESC ADDITIONAL

INVESTMENT (1)

Ukraine

Energy efficiency measures

in municipal buildings and

modernisation of the street

light system in Slavutych

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

NORDIC ENVIRONMENTAL

DEVELOPMENT FUND (NMF)

Distribution by sector

APPROVED BARENTS

HOT SPOTS FACILITY

PROJECTS - (BHSF) (4)

Support for Nordic-Russian

regional and municipal co-

operation

Updating of a previous

BHSF study from 2010

Further development of the

waste management system

in Komi

Support for Nordic-Russian

regional and municipal co-

operation

Energy efficiency measures

in two school buildings and

modernisation of the street

light system in Lozova

Energy efficiency measures

in eleven day-care centres

in Berdiansk

Energy efficiency measures

in two schools in Izium

Energy efficiency measures

in three school buildings in

Kupyansk

Energy efficiency measures

in two school buildings in

Chuhuiv

Modernisation of the street

light system in Dniprodzer-

zhynsk

Energy efficiency measures

in two municipal buildings

in Dniprodzerzhynsk

Energy efficiency measures

in a hospital in Kherson

Energy efficiency measures

in six schools and a hospital

as well as replacement of

street lights in Pavlohrad

Energy efficiency meas-

ures in school buildings in

Kramatorsk

Modernisation of the street

light system in Druzhkivka

Energy efficiency measures

in three school buildings

and modernisation of

the street light system in

Melitopol

Energy efficiency meas-

ures in two pre-schools in

Chuhuiv

Delivery of pre-fabricated

building to Kherson

NEFCO CARBON

FUND PURCHASE

AGREEMENTS (3)

Improved cooking stoves in

Bangladesh

Domestic cooking stoves

substitution programme in

Mozambique

Congo (DRC) improved

cook stoves programme

Energy 35.6 %

Industry 30.7 %

Water 14.9 %

Waste 11.7 %

Agriculture 7.9 %

ARCTIC COUNCIL

PROJECT SUPPORT

INSTRUMENT - (PSI) (12)

BHSF ADDITIONAL

INVESTMENT (1)

Continuation of the Ad-

viser position established in

Kirkenes

BALTIC SEA ACTION PLAN

FUND - (BSAP) (5)

Distribution by country

NORDIC PROJECT FUND

- (NOPEF) (73)

APPROVED NORDIC

ENERGY EFFICIENCY

AND HUMANITARIAN

SUPPORT INITIATIVE

FUND (17) /UKRAINE

Energy efficiency measures

in two day-care centres and

modernisation of the street

light system in Severo-

donetsk

Energy efficiency measures

in three municipal buildings

in Kramatorsk

Energy efficiency meas-

ures in a school building in

Pavlohrad

NEFCO NORWEGIAN

CARBON PROCUREMENT

FACILITY - (NORCAP) (7)

Russia 47.0 %

Ukraine 28.5 %

Estonia, Latvia, Lithuania 18.1 %

Belarus 3.0 %

Other 1.8 %

Poland 1.7 %

NEFCO 2015

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

CASE STUDY

Ukraine

Agricultural

waste turned

into energy

In 2015, the agricultural

company Pivdenagrop-

ererobka LLC in Myrne,

Ukraine, invested in a new

boiler station that will use

agricultural residues such

as stalks, seeds, stems and

haulms. The residues will be

pelleted and burned to sup-

ply heat for the company’s

premises where processing

and canning of vegetables,

fruits and grain take place.

By investing in renewable

energy, Pivdenagropererob-

ka will be able to cut its

dependency on natural gas

and save money by making

use of the generated waste.

NEFCO provided a loan for

the project that will reduce

the emissions of carbon

dioxide by approx. 1,050

tonnes annually.

NEFCO 2015

PHOTO: PATRIK RASTENBERGER

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Five year

comparison

NEFCO IN NUMBERS

Number of projects approved by NEFCO’s Board of Directors

150

100

2011

2012

2013

2014

2015

The total value of funds administered by NEFCO

540

549

469

501

154

In total, NEFCO

managed 35 funds

valued at EUR

458 million at the

end of the year.

2011

2012

2013

2014

2015

NEFCO 2015

458

165

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Personnel and

Board members

2015

BOARD OF DIRECTORS

2015

DENMARK

Søren Bukh Svenningsen

Head of Division, The

Environmental Protection

Agency/Ministry of the

Environment and Food

Mikkel Hagen Hess,

Deputy Head of Depart-

ment, The Trade Council/

Ministry of Foreign Affairs

(from March 2015)

SWEDEN

Jon Kahn

Director, Ministry of the En-

vironment (until December

2015)

Jessica Andersson

Senior Advisor, Ministry of

the Environment and En-

ergy (from January 2016)

Mikael Benthe

Deputy Director, Ministry

for Foreign Affairs, Alter-

nate

OBSERVERS

Annika Rosing

Head of Department,

Nordic Council of Ministers

(until November 2015)

Anna Maria Hill

Mikkelsen,

Senior Adviser, Nordic

Council of Ministers (until

February 2016)

Björn Fritjofsson,

Senior Adviser, Nordic

Council of Ministers (from

March 2016)

Søren Kjær Mortensen

Senior Director, Head of

Origination, Nordic Invest-

ment Bank

Jessica Andersson

Jon Kahn

FINLAND

Ann-Britt Ylinen

Director, Ministry of the

Environment

Kristiina Isokallio

Director, Ministry of the

Environment, Alternate

ICELAND

Danfríður Skarphéðins-

dóttir

Head of Division, Ministry

for the Environment and

Natural Resources

Íris Bjargmundsdóttir,

Head of Division, Minis-

try for the Environment

and Natural Resources,

Alternate

NORWAY

Harald Rensvik

Secretary General, Ministry

of the Environment

Jan Thompson

Senior Adviser, Ministry of

the Environment, Alternate

Harald Rensvik

Magnus Rystedt

Danfríður

Skarphéðinsdóttir

Søren Bukh

Svenningsen

Ann-Britt Ylinen

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

CONTROL

COMMITTEE 2015

Chairman

Bill Fransson

Director

Denmark

Karin Gaardsted

Member of Parliament

Finland

Arto Pirttilahti

Member of Parliament

Iceland

Höskuldur Þórhallsson

Member of Parliament

Norway

Michael Tetzschner

Member of Parliament

Sweden

Penilla Gunther

Member of Parliament

AUDITORS

Sixten Nyman

Authorised

Public Accountant,

KPMG Finland

Helsinki

Hans Åkervall

Authorised

Public Accountant,

KPMG Stockholm

Sweden

SECRETARY TO THE

CONTROL COMMITTEE

Birgitta Immerthal

Authorised

Public Accountant,

KPMG Finland, Helsinki

(until June 2015)

Marcus Tötterman

Authorised

Public Accountant,

KPMG Finland, Helsinki

(from July 2015)

PERSONNEL 2015

Magnus Rystedt,

Managing Director

Husamuddin Ahmadzai,

Special Adviser,

Environment and

Technology

Mia Alén,

Financial Controller

Tita Anttila,

Vice President,

Head of Legal and

Project Administration,

Chief Counsel

Vivi Avikainen,

Assistant

Amund Beitnes,

Senior Investment Manager

Janika Blom,

Legal Counsel -

Carbon Finance and Funds

Ulf Bojö,

Senior Investment Manager

Aliona Fomenco,

Project Officer - Carbon

Finance and Funds

Henrik Forsström,

Senior Adviser - Barents

Hot Spots Facility

Kari Homanen,

Executive Vice President

Kari Hämekoski,

Manager - Carbon Finance

and Funds

Andriy Katashov,

Technical Adviser - Repre-

sentative Office in Kiev,

Ukraine

Karl-Johan Lehtinen,

Senior Manager,

Environmental Affairs

Helle Lindegaard,

Vice President,

Head of Carbon Finance

and Funds,

Senior Legal Counsel

Iryna Lyashenko,

Investment Specialist

- Representative Office

in Kiev, Ukraine

Maria Maliniemi,

Investment Manager

Ronny Nilsson,

Senior Adviser

(from December 2015)

Tina Nyberg,

Assistant - Carbon Finance

and Funds

Bo Eske Nyhus,

Senior Investment Manager

Anja Nystén,

Senior Adviser

- Environment and

Technology

Lia Oker-Blom,

Communications and

Administration Officer

- Nopef

Per Ovesen,

Regional Manager

- Nopef

Mikael Reims,

Manager,

Head of Nopef

Maija Saijonmaa,

Project Manager

- Carbon Finance and Funds

Mirjam Scheinin,

Associate Legal Counsel

Mykhailo Senchuk,

Assistant - Representative

Office in Kiev, Ukraine

Ash Sharma,

Special Adviser,

Climate Change and

Lead Financial Specialist

- Carbon Finance and Funds

Julia Shevchuk,

Chief Investment Adviser

- Representative Office in

Kiev, Ukraine

Heli Sinkko,

Project Officer - Carbon

Finance and Funds

Mikael Sjövall,

Communications Manager

Tua Skand,

Financial Controller

Mia Ståhle-Lauritzon,

Financial Controller

Thor Thorsteinsson,

Senior Financial Manager

Marina Westerholm,

Assistant to the Managing

Director

Johan Willert,

Senior Adviser

(until August 2015)

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

Editors: Lia Oker-Blom,

Mikael Sjövall

Design: Werklig

(www.werklig.com)

Cover photos:

Jonas Häggblom

Printhouse:

Lönnberg Print Oy,

Helsinki 2016

This NEFCO

publication

has been

printed on

FSC certified

paper.

MOF, Alm.del - 2015-16 - Bilag 471: NEFCO Annual Review 2015

NORDIC ENVIRONMENT

FINANCE CORPORATION

Street address: Fabianinkatu 34

Postal address: P. O. Box 241

FI-00171 Helsinki, Finland

tel: +358 10 618 003

fax: +358 9 630 976

www.nefco.org / [email protected]

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