Nordic Development Fund (NDF)

Focus
Adaptation, Mitigation
Method of Support
Grants
Eligible Countries
27 low-income and lower middle income countries in Africa, Asia and Latin America. Eligible countries in Asia include Bangladesh, Cambodia, Kyrgyz Republic, Lao PDR, Maldives, Mongolia, Nepal, Pakistan, Sri Lanka, and Vietnam
Funds Pledged
EUR 1,021.4 million
Funds Received
EUR 878.6 million
Funds Approved
EUR 235.7 million (grants) EUR 934.1 million (credits)
Funds Disbursed
EUR 150.6 million (grants) EUR 845.8 million (credits)
Source: The Nordic Development Fund. “Annual Report 2015.” (As of Mar 2016)
TIPS by USAID Adapt Asia-Pacific

The Norwegian Sovereign Wealth Fund has recently agreed to divest from coalrelated investments. This could mean significantly more money becoming available for climate change adaptation projects, although nothing has been announced yet.

About
The Nordic Development Fund (NDF) is the only joint development finance institution of five Nordic countries – Denmark, Finland, Iceland, Norway and Sweden. The NDF’s capital is provided by the Nordic countries’ development cooperation budgets. The NDF has adopted a new strategy in November 2015, which underlines its role in  the broader climate finance architecture focusing exclusively on climate change and development in low-income and lower middle income countries. It does this primarily through co-financing grants, often cooperating with bilateral and multilateral development institutions that serve to complement and fill gaps in the areas of climate change and development.
Target area
Three focus areas are relevant for NDF grant financing: infrastructure and energy; natural resources; and climate change-related capacity building. The NDF finances both adaptation and mitigation activities, including enhancing country abilities to better respond to climate change impacts on water resources, health, infrastructure, and agriculture, and supporting projects that promote energy efficiency and use of renewable energy sources. Financing may also cover climate change impact analysis and national adaptation planning, as well as ‘climate proofing’ of sectors, geographic areas and specific projects.
How to access the fund
The NDF provides grants by co-financing. It has a strong working relationship with the World Bank, Asian Development Bank, Inter-American Development Bank, African Development Bank and Nordic bilateral development organizations. Projects are often identified through these partnerships. Other project ideas come through Nordic firms, organizations and networks. As the NDF is a co-financing institution, its grants normally constitute a portion of a given project. In addition, the NDF-financed component of the cofinanced project should be in line with the NDF’s mandate and eligibility criteria. The grant amounts vary depending on project scope, ranging from EUR 2 to 5 million.
Approval process

Climate relevance and economic justifications are the core screening criteria; however, while projects may satisfy these conditions, they may not be considered suitable or of sufficiently high-priority to warrant support.

In practice, many other factors are considered before NDF provides support. These include consistency with national development plans, contribution to poverty alleviation, and focus on gender issues. The proposed project should also show evidence of ownership and financial commitment by a co-financing development partner.

All grant decisions are made by the NDF’s Board of Directors.