Finnish Climate Fund — Capital Loans & Equity

Finnish Climate Fund — Capital Loans & Equity

Provides Finnish Climate Fund Capital Loans & Equity for practical innovation and measurable results.

The Finnish Climate Fund (Ilmastorahasto Oy) was a wholly state-owned special-assignment company governed by Finland's Ministry of Economic Affairs and Employment (TEM) that provided equity investments and subordinated capital loans (capital loans) to Finnish projects targeting climate change mitigation, low-carbon industrial transformation, and digitalisation. Investment tickets typically ranged from EUR 4 million to EUR 40 million per project. The fund's mandate required it to act always as a co-investor, capping its contribution at a maximum of 50% of total project financing; it never financed a project as the sole funder. Historical investments included a EUR 5 million subordinated loan to Joensuu Biocoal and a EUR 15 million commitment to the Taaleri bioindustry fund. Target sectors encompassed green hydrogen production, biomass for heavy industry, large-scale renewable energy, energy-efficient industrial infrastructure, protein manufacturing from CO2, and digital innovations contributing to measurable emissions reductions.

The fund was capitalised with EUR 200 million in 2022 and had access to an additional EUR 100 million appropriation through 2025, enabling annual funding allocation to grow from EUR 80 million to EUR 130 million. It made seven funding decisions totalling EUR 45.5 million in 2021 alone. Eligible applicants were Finnish for-profit and nonprofit organisations; universities and individuals were not eligible. No grants were issued — all instruments were equity or subordinated loans.

The Finnish Climate Fund was wound down in May 2024 following the Finnish Government's September 2023 decision to return the fund's 8.31% Neste Corporation shareholding (63,894,123 shares) to direct state ownership. No new applications are being accepted. The fund's investment function is being consolidated under Finnish Industry Investment (Tesi), alongside Business Finland Venture Capital and Oppiva Invest.