NDF Annual Report 2013 by Nordic Development Fund

NORDIC DEVELOPMENT FUND Annual Report 2013

INDEX Report of the Board of Directors 2013

Board of Directors 09 Control Committee 09 Management and Staff

Income Statement 11 Balance Sheet 12 Changes in Equity 13 Cash Flow Statement 13 Notes to the Financial Statements

Auditorsâ&#x20AC;&#x2122; Report 20 Grant Portfolio 23 Credit Portfolio 25

Summary of 2013

NDF MILESTONES

During 2013, the Board approved grant financing for 13 projects for a total value of EUR 39.6 million.

1988 Denmark, Finland, Iceland, Norway and Sweden sign an agreement regarding the establishment of NDF.

Disbursements of grants amounted to EUR 27.3 million (2012: EUR 27.1 million). The disbursements of credits amounted to EUR 8.0 million in 2013 (2012: EUR 14.1 million). The net result for the year before adjustments for currency exchange fluctuations and after disbursements of grant aid totalled EUR -22.0 million in comparison with EUR -25.0 million the previous year. The effects of currency fluctuations showed a result of EUR -12.1 million (2012: EUR -5.1 million). After hedging measures, the effects from currency fluctuations are EUR -9.1 million.

1989 NDF begins its operations providing soft loans for social and economic development. 1991 NDF has a credit stock of EUR 4 million. 1994 NDF’s credit stock amounts to EUR 60 million.

Three projects with credits from NDF were completed in the course of the year. A total of five credit projects are still under implementation at the beginning of 2014.

1995 NDF signs its first private sector loan agreement.

NDF’s Guidelines for Project Identification and Screening underwent further revision in 2013. The guidelines adopted a more proactive focus on gender and a stronger emphasis on issues related to integrity and good governance.

2000 NDF’s credit stock amounts to EUR 360 million.

NDF has developed a system to monitor and evaluate the progress of projects under implementation. The system provides information on how well the project implementation is on track in comparison to the projects’ intended objectives and results, and identifies issues which need attention in individual projects. It is noteworthy that the majority of projects are progressing as planned.

2005 NDF’s member countries do not succeed in reaching an agreement on a fifth capital replenishment for the Fund and thus the Nordic Development Cooperation Ministers recommend a wind-up of NDF.

NDF continued to review its anticorruption work. In 2013, an integrity due diligence procedure was introduced to detect integrity risks.

2008 NDF’s credit stock stands at EUR 691 million.

An evaluation of the Nordic Climate Facility (NCF) was carried out during 2013. The evaluation concluded that the portfolio quality of NCF is good, that the facility responds to demand, and that its costs compare favourably with other similar schemes. In September, a new allocation was approved for NCF. Furthermore, an internal assessment of the Small Grants Facility (SGF) was carried out. The assessment concluded that the SGF has proved to be a useful instrument and co-financing partners have shown interest. A new strategy was approved in December outlining the activities of NDF during the years 2014-2015. The new strategy refers to NDF’s role within the global development and climate finance arena, and that NDF is the only joint Nordic financial institution with a clear mandate focused on climate and development. NDF engaged in a number of selected and focused outreach activities to share NDF’s own experiences and lessons learned: Global Green Growth Knowledge Platform (GGKP), Global Green Growth Forum (3GF), and the nineteenth Conference of the Parties (COP-19) to the UN Framework Convention on Climate Change. In addition, NDF arranged a seminar on innovative climate change financing mechanisms in collaboration with the IDB Group.

2009 Analyses show that there are valid reasons for NDF to continue its activities and the member countries approve of a new mandate, securing continued operations. NDF shifts focus from soft loans for social and economic development to grants for climate change interventions. NDF Board makes its first grant decisions under the new mandate. 2010 During the first 18 months of operation under its new mandate NDF allocates EUR 75 million to 22 new project grants for climate change interventions. 2012 An external evaluation of NDF’s progress under the climate mandate confirms positive results and is encouraging in showing that the reforms done at NDF have paid off. 2014 NDF’s 25th Anniversary.

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Highlights in 2013

Operations, projects and results During 2013, the Board approved grant financing for 13 projects for a total value of EUR 39.6 million. Under the climate change mandate, from 2009 to 2013, NDF has approved 63 projects for a total value of EUR 174.1 million for climate change projects in 16 countries. Nearly half of the approved euro volume is allocated to countries in Sub-Saharan Africa (42%), and the rest for Asia and Latin America. The reduction of greenhouse gases for all approved NDF mitigation projects has been estimated at 4.1 million tons of CO2 equivalents per year. Three projects with credits from NDF were completed in the course of the year. A total of five credit projects are still under implementation at the beginning of 2014. The remaining credits are expected to be completed during 2014. An independent external evaluation of NCF was carried out during 2013. The evaluation concluded that the portfolio quality of NCF is good, that the facility responds to demand, and that its costs compare favourably with other similar schemes. On the basis of the recommendation in the evaluation to replenish the facility, a new allocation was approved for NCF in September. The focus theme under the new allocation is inclusive green growth projects contributing to private sector development. An internal assessment of the SGF, after the second year of operations, concluded that the facility has proved to be a useful instrument and that co-financing partners have shown interest. It also listed a number of lessons learned. On the basis of the assessment, a new allocation to SGF was, in principle, supported by the Board, but it was expected to be processed in early 2014. NDF’s Guidelines for Project Identification and Screening underwent further revision in 2013. The guidelines adopted a more proactive focus on gender and a stronger emphasis on issues related to integrity and good governance. These aspects are expected to enable a strengthened focus towards a selection of projects where key Nordic development priorities can be supported, and thus create value added as a result of NDF’s involvement. Also, more generally, NDF continued to receive favourable feedback from its co-financing partners and partner countries – much in line with the arguments in the independent external evaluation of NDF in 2012 - that it is flexible and able to act quickly, in a value-adding manner that does not cause additional costs. In 2013, in selected thematic issues (e.g., innovative climate change mechanisms, transport sector climate change adaptation), NDF’s input contributed to general developments among development cooperation actors. During recent years, NDF has been developing the Project Performance Rating System (PPR) to monitor and evaluate the progress of projects under implementation. The purpose of the PPR system is to provide information on how well the project implementation is on track in comparison to the projects’ intended objectives and results, and identify issues which need attention in individual projects. The system was presented to NDF’s Board of Directors in December 2013. All climate projects were rated on five areas: preparatory activities, partner agency cooperation,

implementing agency cooperation, implementation progress in components, and outcomes and impacts. Overall, the rating gave a fair view of the status of projects, and on the basis of the report it was noted that the majority of projects are progressing as planned. In addition, the report helped management and staff to focus on issues that need attention and action in individual projects. All projects will continue to be rated once each calendar year. NDF continued to review its anticorruption work in order to further improve its practises. In 2013, an integrity due diligence procedure was introduced to ensure that a potential recipient of NDF financing does not appear on debarment or sanctions list and to find other information regarding such entity that NDF should be aware of in order to detect integrity risks. Additionally, NDF introduced a simple online form for whistleblowers to contact the Anticorruption Committee. On this form, whistleblowers have the option of providing information anonymously. No cases have been closed and no new cases have emerged during 2013; there are currently five cases pending in the Anticorruption Committee. In December, the Board of Directors approved a new strategy document outlining the activities of NDF during the years 2014-2015. NDF will strive to further sharpen its focus on certain areas and themes particularly under the three broad clusters; infrastructure, natural resources and climate change capacity-building, by emphasising the impacts of interventions on private sector development and on employing innovative ways and mechanisms to provide funding. The strategy also refers to NDF’s role within the global development and climate finance arena. As the only joint Nordic financial institution with a clear mandate focused on climate and development, NDF will continue to promote a broad scope of Nordic priorities.

Outreach and international cooperation During 2013, NDF engaged in a number of selected and focused outreach activities to share NDF’s own experiences and lessons learned in order to have a broader impact than on NDF’s own activities only. In April, NDF became a member of the Global Green Growth Knowledge Platform (GGKP), a forum led by the World Bank, OECD and the United Nations Environment Program (UNEP). GGKP is a global network that addresses knowledge gaps in green growth theory and practices for policy-makers and practitioners. NDF was also invited to participate in the Global Green Growth Forum (3GF) in Copenhagen in October. The Forum brought together 250 top-level representatives from international organisations, governments and businesses. NDF presented its experiences in thematic sessions. In November, a seminar on innovative climate change financing mechanisms was arranged in collaboration with the IDB Group. The two-day seminar was attended by over 60 professionals from a variety of institutions, including multilateral and bilateral development financing institutions, governments, the private sector and research institutions from different continents. Follow-up discussions have been held to open up possibilities to engage in similar activities in also the African and Asian regions.

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In November, NDF participated in the nineteenth Conference of the Parties (COP-19) to the UN Framework Convention on Climate Change (UNFCCC) in Warsaw, Poland. NDF had been invited to present its lessons learned from supporting adaptation measures to climate change in the transport sector. During 2013, NDF also launched its new website. The site was visually and technically renewed, in order to help users find information more easily.

Financial issues Disbursements of grants amounted to EUR 27.3 million (2012: EUR 27.1 million). The disbursements of credits amounted to EUR 8.0 million (2012: EUR 14.1 million). The net result for the year before adjustments for currency exchange fluctuations and after disbursements of grant aid totalled EUR -22.0 million in comparison with EUR -25.0 million the previous year. The effects of currency fluctuations showed a result of EUR -12.1 million (2012: EUR -5.1 million). After hedging measures, the effects from currency fluctuations are EUR -9.1 million (2012: EUR -3.5 million). The question of NDF’s future financial resources was discussed by the Board in two meetings, in June and in December. The Nordic Council has twice passed a resolution recommending to the Nordic countries’ governments that more capital be allocated to NDF to further enhance its climate change-related activities. The Board has not come to a conclusion on the issue, but has agreed to continue discussions in 2014, and that a joint response to the recommendation of the Nordic Council be prepared by the Nordic governments. NDF’s Climate Change Projects in 2013 Since the introduction of the climate change mandate in 2009, NDF has approved 63 projects for a total value of EUR 174.1 million for climate change projects in 16 countries (nine countries in Africa, four countries in Asia and three countries in Latin America). Private sector-related facilities constitute approximately 27% out of total approved NDF funding. Approximately 41% of the projects are based on parallel financing and 59% are jointly financed. Approved Financing by Region - EUR 174.1 million

During 2013, the Board of Directors approved grant financing for 13 projects with a total value of EUR 39.6 million. NDF has been active in three broad clusters; infrastructure, natural resources and climate change capacity-building. During 2013, NDF continued to approve and implement activities under the Small Grant Facility (SGF), which is a financing frame of EUR 5 million to be allocated as small-scale financing for studies, project preparatory activities or small project components relating to climate change adaptation and/or mitigation. During the year, an internal assessment of the facility was conducted and presented to the Board. Following the subsequent positive comments, a second allocation to the facility will be presented to the Board in early 2014. Africa Projects Approved in Africa NDF financing EUR m Mozambique Scalable Community Adaptive Solutions 4.0 Zambia Strengthening Climate Resilience Project 4.0 Mozambique Capacity for Climate Resilient Road Sector 3.8 In Africa, NDF’s activities were strengthened with three new projects, of which two are co-financed with the World Bank, and one with the African Development Bank (AfDB). In partnership with the World Bank, NDF is financing Scalable Community-Managed Climate Change Adaptive Solutions Project with EUR 4.0 million in Mozambique. The objective is to reduce vulnerability and strengthen resilience of coastal fishing communities. The overall vision of the project is to bring about transformation of the artisanal fishing sector in Mozambique so that community rights-based fisheries management will re-establish ecosystem health in coastal waters. Regaining ecosystem health will increase ecological resilience to climate change and expand opportunities for tourism, and substantially increase fish catch and catch value thus reducing poverty and increasing social resilience in fishing communities. The project will be implemented by the Institute for Development of Small-scale Fisheries, Ministry of Fisheries, with technical assistance from the international organisation Rare Conservation. In Zambia, NDF is supporting the development of climate-resilient infrastructure standards with a grant of EUR 4.0 million. The Strengthening Climate Resilience Project – Developing Climate Resilient Infrastructure Standards and Codes forms part of a larger component of a multi-donor long-term investment programme, led by the World Bank, addressing climateresilient infrastructure policies and piloting their effective implementation. The programme will play a catalytic role in promoting climate-resilient growth strategies in Zambia. The project will need to be integrated throughout the national transport policy, planning and management system in order to make the climate change resiliency more effective. With a grant of EUR 3.8 million, NDF is financing Developing Capacity for a Climate Resilient Road Sector, Nacala Road Corridor project Phase III, aiming at strengthening the road sector in Mozambique. The AfDB finances the Nacala Road Corridor Project, which develops a transport

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link between Malawi, Zambia and Mozambique to increase East-West connectivity and stimulate socio-economic development. The current ongoing phase of the project covers a road section which faces high climatic risks due to the hillier terrain. NDF has agreed to support the sustainability of the project by enhancing climate change considerations in planning and design of road transport infrastructure. NDF has used early lessons learned from other transport adaptation projects in the design and will provide additional expertise not covered by other financers. The objective of the NDF support is to provide the National Road Administration, and other key stakeholders, with capacity and additional tools to manage climate impact threats to road development. The NDF project aims at enhancing the capacity within the stakeholder groups to make road development plans, improve construction methods and ensure active and sustainable asset management. Asia Projects Approved in Asia NDF financing EUR m Vietnam Low Carbon Agriculture Support through Biogas 4.1 Regional GMS - Climate Resilience and Low Carbon Strategies 4.0 Regional Improving Nitrogen Use Efficiency for Climate Change Mitigation and Adaptation 3.7 Nepal Watershed Capacity Building for Climate Change Adaptation 3.6 Nepal Pilot Project to test Climate Change Benefits of Biochar 0.5 In co-financing with the Asian Development Bank (ADB) in 2013, NDF approved financing for five new projects in Asia. In Vietnam, NDF is financing transfer and pilot testing of innovative biogas technologies through the project Biogas Expansion under the Low Carbon Agricultural Support Project (LCASP). The NDF support will help LCASP demonstrate effective utilisation of biogas, strengthen value chains and develop linkages with academia and technical institutions. Furthermore, it will support the development of Nationally Appropriate Mitigation Actions (NAMA) relating to waste management in Vietnam. The project will focus on expansion of biogas in ten provinces located in northern, central and southern parts of Vietnam. It will support small, medium and large scale biogas plants and contribute to tangible improvements in livelihoods of small farmers. The NDF contribution is EUR 4.1 million. With a grant of EUR 4 million, NDF is supporting climate resilience in the Greater Mekong Sub-Region (GMS). The Climate Resilience and Low Carbon Strategies in GMS will assist countries in the GMS to develop tools, capacity and processes that will enhance their ability to adapt to climate change in an efficient and equitable manner. Furthermore, the project will develop Nationally Appropriate Mitigation Actions (NAMA), test low carbon interventions in the transport and energy sectors, and strengthen institutional capacity to monitor, report and verify CO2 emission reductions. The NDF support will be part of the GMS Core Environment Program and Biodiversity Conservation Initiative, which is financed by Finland, Sweden, ADB and GEF. The project will combine adaptation and mitigation activities.

Also in the GMS, NDF is financing the Improving Nitrogen-use Efficiency for Climate Change Mitigation in the GMS. The project aims to reduce the use of synthetic nitrogen fertilisers in the agricultural sector. At the same time, the project will support the farmers by introducing climate-smart agricultural practices to increase the productivity and build climate-resilient farming systems. The project is expected to reduce nitrous oxide emissions, increase food-security and income among farmers, have health benefits for the farming communities, and have awareness raising influence on the whole sector. Focus will be on women and their key role in the agricultural sector. NDF is supporting the project with EUR 3.7 million. Together with the Government of Nepal and the ADB, NDF is financing Building Climate Resilience of Watersheds in Mountain Eco-Regions (BCRWME) in Nepal with a grant of EUR 3.6 million. The project aims to improve access to and enhance the reliability of water supply for communities living in the watersheds of Nepal river systems, which are significantly vulnerable to climate change. The project is expected to benefit farm households with improved irrigation, and furthermore, households will benefit directly from improved access to water for domestic use, especially during the dry season. With a grant of EUR 500,000, NDF is supporting Pilot Project to Test the Climate Change Benefits of Biochar in Nepal. The objective of the biochar project is to pilot-test, in three agro-ecological zones of Nepal, biochar production as a climate change adapting soil amendment, carbon sequestration method, and rural energy source. The project intends to test what feedstock burnt in what temperature produces the best biochar for different ecological areas of Nepal. The biochar stove design is important and therefore different models will be tested under the project. One of the main outputs will be to produce a handbook for biochar application, including lessons learned, which can be used by anyone who wants to apply the biochar technology. Latin America Projects Approved in Latin America Bolivia Pilot Adaptation Plan of Action for High Inter-Valley Communities Regional Building Climate Resilience in MSMEs Honduras Asset Adaptation to Climate Change in poor neighbourhoods Regional IDEAS Energy Innovation Contest

NDF financing EUR m 4.0 3.5 0.24 0.2

In Latin America, four new projects will benefit from NDF financing in collaboration with the Inter-American Development Bank (IDB). In Bolivia, with a grant of EUR 4 million, NDF is supporting Multipurpose Water Resources and Irrigation Project for the Municipalities of Batallas, Pucarani and El Alto/Pilot Adaptation Plan of Action for High Inter-Valley Communities. The NDF support is linked to the Pilot Program on Climate Resilience, a water resources project financed by the Climate Investment Funds (CIF) and IDB to supply fresh water to the metropolitan area of Bolivia. With NDF funding, the

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affected downstream rural communities are helped to adapt to the reduced water availability in the future as a result of the water intake but also as consequence of the reduced natural water flows because of climate change. The project will help the communities to increase the agricultural productivity and living standards by implementing several adaptation measures including water collection, regulation and storage together with conveyance of water for drinking and irrigation. NDF is providing EUR 3.5 million to develop climate-resilience in micro, small and medium-sized enterprises in Latin America and the Caribbean. Building Climate Resilience in MSMEs in Latin America and the Caribbean (PROADAPT) has a general objective to increase the climate-resilience of micro, small and medium-sized (MSME) companies and the local communities in which they operate, while also looking for new business opportunities for MSMEs. MSMEs in the region will also benefit from a special climate change adaptation knowledge platform that will share knowledge, models, methodologies and lessons learned from the project. With a grant of EUR 240,000, NDF is supporting Adaptation to Climate Change in Poor Neighbourhoods of Tegucigalpa. The objective of this technical cooperation project is to integrate climate change adaptation actions into an IDB program that will make comprehensive neighbourhood upgrading plans in poor areas of the Honduran capital Tegucigalpa. The NDF support will allow poor households to build resilience against severe weather, protect their assets during severe weather, and rebuild them after such events. Another objective will be to generate capacity in the Honduran Social Investment Fund to integrate climate change considerations in their future investments. Together with the IDB, The Multilateral Investment Fund, the government of South Korea and GDF SUEZ, NDF is financing IDEAS Energy Innovation Contest 2013 with EUR 200,000. The contest is seeking proposals that promote innovative solutions to energy problems, benefit local communities, create jobs and contribute to the reduction of greenhouse gas emissions in Latin America and the Caribbean region. The objective is to support innovative projects, promote research and development, and encourage introduction of new applied technology solutions in the field of renewable energy and energy efficiency with special focus on improving the energy access in rural areas.

In its previous calls, NCF received 442 applications and 40 climate projects have been financed by the facility. The themes covered by the three calls included energy efficiency and water resources, urban adaptation to climate change and renewable energy, as well as innovative low-cost climate solutions with a focus on local business development. Many of the projects operate in an interesting area between the public and private sectors, thereby aiming to strengthen NDFâ&#x20AC;&#x2122;s value-adding, innovative and risk-sharing role in this area. Since the inception of the facility in 2009, 12 projects have been completed. Cooperation with Co-Financing Partners An enhanced cooperation with the African Development Bank (AfDB) was pursued throughout the year. In May, NDF signed an amended co-financing agreement with the AfDB. The agreement reflects better NDFâ&#x20AC;&#x2122;s current mandate and co-financing modalities, and therefore enhances possibilities for cooperation with the AfDB. Later in the year, NDF entered into its first co-financing project with the AfDB since 2005 and there are other co-financing projects in the planning pipeline. Also with the World Bank, Asian Development Bank and the Inter-American Development Bank cooperation in the form of regular policy and operational level dialogue was continued during the year. New co-financing projects were signed with all of them. NDF continued the mutually beneficial cooperation also with Nordic co-financing partners (SIDA, ICEIDA, Ministry for Foreign Affairs of Finland) in selected, earlier approved projects. Credits

Global Projects Approved Globally Global NCF - Fourth Call for proposals

The facility was established in 2009 and it is based on calls for proposals with specific themes. In the beginning of 2013, when the facility had received funding for three calls for proposals amounting to EUR 18.0 million, an external evaluation was carried out. The evaluation confirmed positive overall findings and constructive recommendations for further work. Consequently, an allocation of EUR 4.0 million was approved by the NDF Board of Directors in September, and the fourth call for proposals was launched in December 2013, with the theme inclusive green growth projects contributing to private sector development. Preference will be given to projects in Sub-Saharan Africa.

NDF financing EUR m 4.0

Nordic Climate Facility The Nordic Climate Facility (NCF) is financed by NDF and implemented in cooperation with the Nordic Environment Finance Corporation (NEFCO). Through the facility, NDF provides grants to development projects that have the potential to combat climate change and reduce poverty in low-income countries. It promotes the transfer of technology, know-how and innovative ideas between the Nordic countries and low-income countries facing climate change.

At the end of 2013, NDF had entered into 188 credit agreements, the total value of which, including additional financing and adjusted for cancellations and calculating the EUR/SDR currency exchange rate as at 31 December 2013, amounted to EUR 892.5 million (2012: EUR 914.8 million). Of these agreements, 160 were credits to public sector projects (EUR 851.0 million), 25 were loans with equity features or equity investments (EUR 29.4 million) and three were other loans (EUR 12.1 million). As at 31 December 2013, disbursements under signed agreements amounted to EUR 837.3 million; approximately 57.4% of this amount is denominated in SDR. As a result of the weakening of the SDR against the euro, the value of the outstanding SDR credits decreased by EUR 12.1 million. After hedging measures, the decrease in value is EUR 9.1 million.

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NDF’s participation in the HIPC Initiative

Liquidity and capital

Since the World Bank and the International Monetary Fund adopted the “Debt Initiative for Heavily Indebted Poor Countries” (HIPC), NDF has participated in the initiative through the HIPC Trust Fund, which is administered by IDA. By the end of 2013, NDF had made allocations to the HIPC Initiative for debt relief to nine of the Fund’s borrowing countries.

The liquid assets of NDF are managed by NIB and Nordea on behalf of NDF. The average interest rate has been approximately 0.2% (2012: 0.05%). NDF’s deposits are placed on 1-12 month intervals. The liquidity as per 31 December 2013 was EUR 97.8 million (2012: EUR 93.1 million).

The allocations made in previous years from NDF’s accumulated net income before foreign exchange differences amounts to EUR 29.6 million to cover the obligations of the Fund under the enhanced HIPC initiative. This amount has been paid into the HIPC Trust Fund.

During the year, disbursements amounted to EUR 35.3 million (2012: EUR 41.2 million), EUR 27.3 million on grants and EUR 8.0 million on credits. At the end of the year, accumulated disbursements on grants amounted to EUR 83.1 million (2012: EUR 55.8 million) and EUR 837.3 million (2012: EUR 829.3 million) on credits. Upon request by the Board, member countries paid in total EUR 19.5 million of Fund capital in 2013 (2012: EUR 25.5 million).

Cooperation with Nordic institutions During 2013, NDF received repayments under disbursed credits amounting to EUR 14.3 million. Together with the Nordic Investment Bank (NIB) and the Nordic Environment Finance Corporation (NEFCO), NDF hosted a visit in April by Dagfinn Høybråten, the new Secretary General of the Nordic Council of Ministers. NDF maintained its close contacts and dialogue at various levels with both the Nordic Council and the Nordic Council of Ministers in issues relating to climate and development. The aim is to exchange information and discuss NDF’s role in this context. Cooperation with NEFCO was continued through the new phase of the Nordic Climate Facility (NCF), approved in September. Steering of the NCF, including the projects from its earlier phases, was continued particularly in the joint Management Committee of NCF. The committee’s operational rules were also clarified. NDF cooperates closely with the Nordic Investment Bank (NIB) mainly through shared office premises, staff administration, IT services, accounting and financial management. Cooperation and contacts in all these matters between NIB and NDF are regular and frequent, and provide synergies for the two institutions.

Board of Directors The Chair of the Board for the period 1 January to 30 April 2013 was Egill Heiđar Gislason (Iceland), with Harald Tollan (Norway) as Deputy Chair. As of 1 May, Harald Tollan took over the chair with Lars Roth (Sweden) as Deputy Chair. Sigfús Ólafsson was appointed new Icelandic alternate as of 18 January 2013, succeeding Anna Karlsdóttir. As of 21 February 2013, Lars Roth was appointed the Swedish member of the Board succeeding Anna Westerholm. Riikka Laatu was appointed the Finnish member as of 19 September, 2013 succeeding Satu Santala, and Laura Torvinen was appointed Finnish alternate, succeeding Jukka Pesola the same date. A list of NDF Board members and their alternates can be found on page 9. Administration

In selected thematic and operational matters cooperation and exchange of information also took place between NDF, NIB and NEFCO, for the benefit of all three institutions. Capital and accounting currency NDF changed its capital and accounting currency from SDR to EUR on 1 January 2001. Fluctuations in the SDR/EUR exchange rate may lead to substantial variations in financial results, positive or negative, from one year to another. Therefore, since 2012, hedging measures have been taken to decrease the effect from the exchange rate fluctuations. About 35% of the credits denominated in SDR are hedged against these effects. The Fund’s financial result for 2013 shows a foreign exchange difference of EUR -12.1 million before hedging and EUR -9.1 million after hedging (2012: EUR -5.1 million before hedging and EUR -3.5 after hedging). This difference is to a large extent due to the fact that the US dollar, which represents 41.9% of the SDR currency basket, weakened during 2013 against NDF’s capital and accounting currency, the euro.

In October 2013, the Government of Finland and NDF signed a renewed Host Country Agreement. As international organisations do not fall under any national legislation, a number of matters of both principal and practical nature are settled by an agreement between the organisation and the host country. Accordingly, the Host Country Agreement regulates the relations between the Government of Finland and NDF and is one of NDF’s constituent documents. The renewed agreement strengthens NDF’s status as an international organisation and includes also provisions on inter alia immunities and privileges as well as provisions on the staff’s pension and social security coverage. The agreement will enter into force after final parliamentary approval, after which it will be available on NDF’s website. The NDF office has, along with the NIB headquarters, been certified as a Green Office by WWF Finland since 2009. The biggest share of NDF’s carbon footprint comes from air travel, which in 2013 amounted to 88 tons of CO2 equivalents.

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As of 31 December 2013, thirteen people were employed by NDF (2012:13 employees). In addition, NDF has had a long-term agreement with an in-house consultant. A summary of the employees can be found on page 9. Control Committee The Control Committee ensures that the Fund’s operations are conducted in accordance with its Statutes and is responsible for its audit. The Committee presented its annual auditor’s report to the Nordic Council of Ministers (NCM) in March 2013. The Control Committee met twice in 2013. A list of the members of the Committee can be found on page 9.

Helsinki, 5 March 2014

HARALD TOLLAN Chair of the Board

LARS FRIIS-JENSEN

RIIKKA LAATU

Financial results and allocation NDF’s total assets as of 31 December 2013 amounted to EUR 863,201,959 (2012: EUR 874,716,461). This amount includes outstanding credits to public sector projects, other loans with equity features and equity investments to the amount of EUR 750,290,178 (2012: EUR 769,053,590) and placements with credit institutions to the amount of EUR 97,833,912 (2012: EUR 93,141,728). A reversal of provisions against possible losses on other loans, loans with equity features and equity investments amounting to EUR 970,523 was made in the accounts of 2013. The previous year showed an increase of EUR 132,816.

LARS ROTH

EGILL HEIĐAR GISLASON PASI HELLMAN Managing Director

Commitments under credits, signed but not yet disbursed, were distributed as follows: MEUR 2013 2012 Credits 16.0 33.0 As of 31 December 2013, NDF’s capital consisted of SDR 515 million and EUR 290.9 million in paid-in fund capital (2012: SDR 515 million and EUR 271.4 million) and EUR -119,559,268 (2012: EUR -88,497,429) in accumulated net income after adjustments for currency exchange fluctuations. The Fund’s income during 2013, amounting to EUR 7,210,422 (2012: EUR 5,369,001), consisted of income from credits to the public sector to the amount of EUR 5,725,401 (2012: EUR 5,993,800), interest on placements with credit institutions of EUR 197,593 (2012: EUR 50,880) and EUR 1,287,428 (2012: EUR -677,034) as remuneration on equity loans and other loans. Zimbabwe continues to be in arrears to NDF. All of its accrued, outstanding obligations towards NDF were therefore placed in non-accrual status. Administrative expenses were EUR 2,819,777 (2012: EUR 3,198,647). The largest single item of expenditure consists of salaries and ancillary expenses of EUR 1,935,166 (2012: EUR 1,887,806). The net income for the year, which after adjustments for currency exchange fluctuations and hedging measures of EUR -9,142,612 (2012: EUR -3,458,513), amounts to EUR -31,061,839 (2012: EUR -28,464,455), is carried forward to the new account. The income statement, balance sheet, changes in equity, cash flow and notes can be found on pages 11-19.

Board of Directors

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BOARD OF DIRECTORS *)

CONTROL COMMITTEE *)

MANAGEMENT AND STAFF

DENMARK Christoffer Bertelsen, Senior Adviser, Ministry of Foreign Affairs (until 31.12.2013) Lars Friis-Jensen, Special Adviser, Ministry of Foreign Affairs (as of 1.1.2014) Deputy: Flemming Winther Olsen, Senior Adviser, Ministry of Foreign Affairs

CHAIRMAN Bill Fransson, Managing Director DENMARK Thomas Jensen, Member of Parliament FINLAND Tuula Peltonen, Member of Parliament ICELAND Ragnheiđur Ríkharđsdóttir, Member of Parliament NORWAY Hans Frode Kielland Asmyhr, Member of Parliament SWEDEN Åsa Torstensson, Member of Parliament

Pasi Hellman, Managing Director Leena Klossner, Deputy Director

FINLAND Riikka Laatu, Deputy Director General, Ministry for Foreign Affairs Deputy: Laura Torvinen, Director, Ministry for Foreign Affairs ICELAND Egill Heiđar Gislason, Advisor Deputy: Sigfús Ólafsson, Manager Marketing, Loftleiðir Icelandic NORWAY Harald Tollan, Senior Adviser, the Royal Ministry of Foreign Affairs, Chair of the Board Deputy: Hans Olav Ibrekk, Policy Director, the Royal Ministry of Foreign Affairs

AUDITORS APPOINTED BY THE CONTROL COMMITTEE Sixten Nyman, Authorised Public Accountant, KPMG, Finland Per Gunslev, State Authorised Public Accountant, KPMG, Denmark Secretary to the Control Committee Birgitta Immerthal, KPMG, Finland *) As of 31 December 2013

SWEDEN Lars Roth, Desk Officer, Ministry for Foreign Affairs, Deputy Chair of the Board Deputy: Lena Kövamees, Senior Programme Manager, Sida Observer: Johan Ljungberg, Senior Director, Nordic Investment Bank *) As of 31 December 2013

Management and staff

Juhani Annanpalo, Country Program Manager (until 31 December 2013) Jesper Pedersen, Chief Procurement Officer (as of 1 March 2014) Hannu Eerola, Country Program Manager Martina Jägerhorn, Country Program Manager Aage Jørgensen, Country Program Manager Linda Lundqvist, Chief Counsel and Country Program Manager Emeli Möller, Country Program Manager Johanna Palmberg, Country Program Manager Mats Slotte, Manager, Financial Administration Jessica Suominen, Financial Administrator (on maternity leave as of 9 April 2013) Dominic Goode, Financial Administrator (as of 18 March 2013) Ann-Christin Lundin, Secretary Maria Talari, Administration and Information Officer

I N C O M E S TAT E M E N T ( a m o u n t s i n E U R )

Note 1.1 - 31.12.2013 INCOME Service charges from credits 5,604,174.70 Income from loans with equity features 1,287,427.94 Fee and commission income 121,226.57 Interest income from placements with credit institutions 197,592.75 Interest income from cash and balances with banks - Total income 7,210,421.96

EXPENSES Grant financing for climate projects (9) 27,299,553.93 Refund of grant financing - Fee and commission expenses 2,114.66 Commission expenses, derivative instruments 21,772.90 General administrative expenses (10) 2,819,777.13 Depreciation/amortisation on tangible and intangible assets (7) 10,976.50 Changes in provision for credit losses, write-down of loans and reversals (6) -970,523.06 Total expenses 29,183,672.06 Net result for the year before foreign exchange differences and unreal./real. g/l derivatives Foreign exchange differences Unrealised gains/losses on fair value of derivative instruments (2) Realised gains/losses on derivative instruments Foreign exchange differences, net Unrealised gains/losses on fair value of forward contracts Unrealised/realised gains/losses on forward contracts

Net result for the year

1.1 - 31.12.2012 5,789,489.64 -677,033.75 204,310.79 50,880.21 1,353.61 5,369,000.50

27,118,799.56 -89,637.28 2,380.28 1,213.71 3,198,646.68 10,723.59 132,815.59 30,374,942.13

-21,973,250.10

-25,005,941.63

-12,149,892.53

-5,087,507.87

2,723,739.00 283,541.89 -9,142,611.64

1,624,595.00 4,400.00 -3,458,512.87

54,023.00 54,023.00 -31,061,838.74

-28,464,454.50

BALANCE SHEET (amounts in EUR)

Note

ASSETS Cash and cash equivalents (1) Other long-term financial placements (1)

31.12.2013

62,427,713.16 35,406,198.73 97,833,911.89

31.12.2012

92,915,353.02 226,374.89 93,141,727.91

Other assets 5,455,951.71 5,966,596.30 Forward contracts 73,796.97 Derivative instruments (2) 8,078,334.00 5,354,595.00 Accrued income 1,443,025.87 1,174,737.33 Credits with government guarantee outstanding (3) 740,573,820.61 758,785,662.23 Other loans outstanding (4) 5,602,469.60 6,149,829.76 Loans with equity features and equity investments outstanding (5) 4,113,887.99 4,118,098.15 Intangible assets (7) 132.05 222.05 Tangible assets (7) 26,628.59 24,992.21 Total assets

863,201,959.28

874,716,460.95

LIABILITIES AND EQUITY

Liabilities Other liabilities Equity (8) Fund capital SDR 515 000 000 Fund capital EUR 330 000 000 Paid-in fund capital

424,746.68

377,409.60

982,336,480.71

962,836,480.71

Accumulated net result

-119,559,268.10

-88,497,429.36

Total equity

862,777,212.61

874,339,051.35

Total liabilities and equity

863,201,959.28

874,716,460.95

CHANGES IN EQUITY (amounts in EUR 1,000)

Paid-in fund capital Accumulated net income Result for the year Equity as of 1 January 2012 937,336 -60,033 0 Transfers between equity items -28,464 28,464 Paid-in fund capital 25,500 Result for the year -28,464 Equity as of 31 December 2012 962,836 -88,497 0 Transfers between equity items -31,062 31,062 Paid-in fund capital 19,500 Result for the year -31,062 Equity as of 31 December 2013 982,336 -119,559 0

Total 877,304 0 25,500 -28,464 874,339 0 19,500 -31,062 862,777

CASH FLOW STATEMENT (amounts in EUR 1,000) 31 Dec. 2013 31 Dec. 2012 Cash flow from operating activities: Net result for the year Depreciation/amortisation on tangible and intangible assets Foreign exchange differences Fair value of derivative instruments Changes in accrued income Changes in provision for credit losses and write-down of loans Cash flow from operating activities

-31,062 11 12,150 -2,778 -268 -971 -22,918

-28,464 11 5,088 -1,625 67 133 -24,791

Cash flow from investing activities: Credits disbursed -7,993 -14,095 Repayments of credits 14,313 12,938 Disbursed equity loans and equity investments -11 -5 Repayments of equity loans and equity investments 986 2,201 Repayments of other loans 547 547 Changes in placements with a maturity more than 6 months -35,180 -1 Changes in other assets and liabilities 558 825 Changes in derivative instruments -20 -3,730 Changes in tangible and intangible assets -13 -14 Net cash flow from investing activities -26,812 -1,334

Cash flow from financing activities: Paid-in fund capital

19,500

25,500

Foreign exchange differences

-258

172

Changes in cash and cash equivalents

-30,488

-454

Cash and cash equivalents consist of:

31 Dec. 2013

31 Dec. 2012

Cash and balances with banks Placements with a maturity of less than 6 months

4,980 57,448

4,469 88,447

Total cash and cash equivalents

62,428

92,915

The cash flow statement has been prepared using the indirect method and cash flow items cannot be directly concluded from the balance sheet and income statement.

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

General operating policies The purpose of the Nordic Development Fund (NDF, “the Fund”) is to promote economic and social development in developing countries through participation in financing, on concessional terms, of projects of interest to the Nordic countries. The headquarters of the Fund are in Helsinki, Finland, at the premises of the Nordic Investment Bank. On 9 November 1998, a new Agreement regarding NDF was signed by its member countries. The new Agreement, which replaced the Agreement of 3 November 1988, entered into force on 18 September 1999. The new Agreement contains provisions concerning the Fund’s immunity and the exemption of the Fund’s assets and income from all taxation. The Fund has the legal status of an international legal person, with full legal capacity. A Headquarters Agreement between NDF and the Government of Finland was signed on 14 October 1999 and renewed in October 2013. The new agreement is expected to enter into force 2014. Pursuant to the recommendation of the NDF Board of Directors to the Nordic Council of Ministers, the Nordic Cooperation Ministers approved amendments to NDF’s bylaws in 2009 and NDF started to operate under its new mandate to support interventions aimed at adaptation to and mitigation of the negative effects of climate change. The capital of NDF shall in the future be utilised in the form of grant aid for climate-related interventions in low-income countries. This capital, approximately one billion euros over a period of 35 years consists of repayments on the 188 credits NDF granted during 1989-2005 The last repayment is due in 2045. Summary of significant accounting policies

Basis of preparation of financial statements The Financial Statements have been prepared in accordance with methods of valuation and recognition of income and expenses as described below. As from 1 January 2001, the Fund’s Financial Statements are presented in euro in accordance with the decision of the Nordic Council of Ministers of 24 August 2000 to replace SDR with EUR. The paid-in fund capital has been converted into euro. The Fund’s Financial Statements are presented in euro. With the exceptions noted below, they are based on historical cost. Assessments in preparation of financial statements The preparation of financial statements requires management to make assessments and estimates that affect the result, financial position and additional disclosures. Such assessments and estimates are based on available information. Actual results may differ materially from the assessments made. Foreign currency translation Monetary assets and liabilities denominated in currencies other than euro are translated into euro at the rate quoted by the European Central Bank (see Note 12). Any gain or loss arising from the valuation appears in the Income Statement as “Foreign exchange differences” and are mainly related to the SDR rate. As NDF will for many years to come have outstanding credits denominated in SDR, changes in the SDR-euro rate may lead to the Income Statement showing substantial foreign exchange differences since these currency positions are not 100% hedged

against changes in foreign exchange rates. However, in 2012, measures were taken to reduce the effects from the foreign exchange differences by hedging 35% of the credits denominated in SDR. Non-monetary assets are recorded in euro at the euro rate prevailing on the date of their acquisition.

Cash and cash equivalents Cash and Cash Equivalents consist of monetary assets and placements with an original maturity of up to 6 months. Derivative instruments Approximately 35% of the SDR portfolio is protected against exchange rate effects through currency options. In order to increase the return on the liquidity, in 2013 NDF entered into forward and deposition contracts with a commercial bank. The derivative instruments are valued at fair value at the end of the year and the change in fair value is recognised in the income statement. Placements with credit institutions NDF has invested its monetary assets with the Nordic Investment Bank and a commercial bank at current market interest rates. The placements are initially recognised at cost (normally nominal value) at settlement date. Placements are also recorded at cost in the Annual Report. Accrued interest on placements is recorded within Accrued Income in the Balance Sheet. Approximately 50% of its cash and cash equivalents are placed with a commercial bank. Placements with credit institutions longer than 6 months are shown as investments in the Cash Flow Statement. The amount is included in the Balance Sheet as Other long-term financial placements. Credits with government guarantee outstanding The recipient countries for NDF credits are low-income developing countries. The credit period for credits with government guarantee is 40 years, including a 10-year grace period. The loans are interest-free. The credits are initially recognised at cost at settlement date. For payments which are more than 180 days overdue, the Fund places all credits to the borrower in question in non-accrual status, whereupon the Fund stops recording accrued service charges and fee and commission revenue as income on the Income Statement. All accrued but unpaid income in respect of the borrower in question that had been recorded as income is then deducted from the Income Statement. As of 31 December 2013, Zimbabwe was more than 180 days overdue with payments. There is a considerable concessionality in the credits from NDF as they are interest-free and have very long maturities. Provision for loan losses NDF’s lending conditions allow for a long-term view to be taken of the repayment capacity of recipient countries. In the event of debt consolidation, it is assumed that credits from NDF will be treated in the same manner as loans from other multilateral institutions. Credits outstanding are recognised in the Balance Sheet at their recoverable amount. Loans with government guarantee outstanding are recorded net of provisions for possible loan losses

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

and actual loan losses. Provision for possible loan losses is established based on the assessment of the nature and maturity structure of the credit portfolio.

Other loans outstanding Other loans outstanding consist of loans with financial liability features to the private sector. The loans are initially recognised at cost at settlement day. In the Balance Sheet, other loans outstanding are recorded net of provisions for actual and possible loan losses. A provision for possible loan losses is established based on the assessment of the nature and maturity structure of the loan portfolio. Loans with equity features and equity investments The statutes of NDF enable the Fund, as an integrated and permanent part of its operations, to provide financing to private sector activities in developing countries without government guarantee. Loans with equity features and equity investments are recognised in the Balance Sheet at cost after write-down. The value of outstanding loans with equity features and equity investments are continuously revalued by the Fund. If the book value exceeds the valuation made, a corresponding write-down is made. Write-downs are presented separately in the Income Statement. Intangible assets Intangible assets mainly consist of investments in software and software licenses for IT-systems. The investments are carried at historical cost and are amortised over the assessed useful life of the assets, which is estimated to be between 3 and 5 years. The amortisations are made on a straight-line basis. Tangible assets Tangible assets are recognised at historical cost, less any accumulated depreciation based on their assessed useful life. The depreciation period for tangible assets is determined by assessing the individual item, usually 3 to 5 years. Write-downs and impairment of intangible and tangible assets The Fund’s assets are reviewed annually for impairment. If there is any objective evidence of impairment, the impairment loss is determined based on the recoverable amount of the assets. Equity In August 2000, the Nordic Council of Ministers passed a resolution to increase the capital of NDF by EUR 330 million. After this replenishment, the capital of the Nordic Development Fund amounted to SDR 515 million and EUR 330 million. As of 31 December 2013, SDR 515 million - the equivalent of EUR 691 million- and EUR 291 million, totalling EUR 982 million has been paid in by the owners. Payment of the remainder of the subscribed capital will take place upon request by the Fund’s Board of Directors. Since the World Bank and the International Monetary Fund (IMF) initiated the “Debt Initiative for Heavily Indebted Poor Countries (HIPC) in 1996, NDF has participated in this debt relief initiative through the HIPC Trust Fund which is administered by IDA. The enhancement of the initiative carried out in 1999 called for further financial commitments by NDF. To this end, the Nordic Council of Ministers in 2000 approved the amendment of NDF’s statutes in order to

provide a general authorisation for the Fund to provide its part of shared contributions under debt relief initiatives in the framework of internationally co-ordinated initiatives in which other multilateral organisations participate. The allocated funds for HIPC were a total of EUR 29.6 million. These funds have been paid in to the HIPC Trust Fund between 1999 and 2010.

Income from service and commitment charges, loans with equity features and equity investments The Fund’s long-term lending with government guarantee is interest-free, but a service charge of 0.75% per annum is collected on outstanding amounts. A commitment charge of 0.5 % per annum is collected on any undisbursed balance one year after the loan agreement has been signed. Income from other loans is presented within Service charges from credits in the Income Statement. Income from loans with equity features is normally related to the return received by the shareholders of the company. Income from service charges on lending and income from loans with equity features and equity investments are presented as separate items in the Income Statement. Commitment charges are presented within Fee and commission income. Grant financing As a disbursement is made to a climate project, the cost is accounted under “Grant financing for climate projects” in the income statement. Upon completion of a project or cancellation of a grant, any refund is written back as a reduction of the total costs for the year under “Refund of grant financing”. General administrative expenses NDF receives a host country payment from the Finnish government equal to the tax levied on the salaries of the Fund’s employees. The host country payment, which the Fund received in 2013, amounted to EUR 464,120 (2012: EUR 413,584). The payment is accounted for as a reduction in the Fund’s administrative expenses. Employees’ pensions and insurance The Fund is responsible for offering pension protection to its personnel. In accordance with the host country agreement between the Fund and the Finnish Government, the Fund has adopted the Finnish government employee pension plan for the Fund’s personnel. The Fund’s liability in respect to pension rights is completely covered. Contributions to the pension plan, which are paid to the State Pension Fund, are calculated as a percentage of the salaries. Ministry of Finance in Finland determines the basis for the contributions and establishes the actual amount of the contributions by recommendation of the local government pensions institution Keva. Under the Finnish pension system at present, the usual age of retirement is 63-68. NDF has also introduced an additional pension system for its permanent employees. The additional pension insurance is a group pension insurance plan that is based on a defined contribution plan. In addition to the Finnish social security system for its employees, NDF has subscribed to a comprehensive life, accident, health, disability and travel insurance programme.

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Notes to the Income Statement and the Balance Sheet

Credits outstanding:

(Note 1) Cash and cash equivalents and other long-term financial placements

(EUR 1,000): Bangladesh Benin Bolivia Botswana Burkina Faso Cambodia Cape Verde China Colombia Dominican Republic Ethiopia Ghana Honduras Indonesia Jamaica Kenya Kyrgyz Republic Lao PDR Malawi Maldives Mauritius Mozambique Mongolia Namibia Nepal Nicaragua Pakistan Philippines Rwanda Senegal Sri Lanka Tanzania Tunisia Uganda Vietnam Zambia Zimbabwe Credits outstanding Credits in default (Zimbabwe) Total, credits outstanding

(EUR 1,000) Cash and cash equivalents Cash and balances with banks Placements with credit institution Total, cash and cash equivalents Other long-term financial placements Other long-term financial placements Total, other long-term financial placements Total, cash and cash equivalents and other long-term financial placements

31 Dec. 2013

31 Dec. 2012

4,980 57,448 62,428

4,469 88,447 92,915

35,406 35,406

97,834

226 226

93,142

The remaining maturity of placements, counted from the balance sheet date to maturity, is as follows: (EUR 1,000) Up to and including 3 months More than 3 months and up to and including 6 months Total

31 Dec. 2013 77,436 14,991 92,427

31 Dec. 2012 88,447 88,447

(Note 2) Derivative instruments (EUR 1,000) 31 Dec. 2013 31 Dec. 2012 Purchased option contracts - 3,730 Fair value of option contracts at beginning of year 5,355 Fair value of option contracts at end of year 8,078 5,355 Change in fair value 2,724 1,625 NDF has received adequate collateral that covers the derivative instrumentsâ&#x20AC;&#x2122; market value.

(Note 3) Credits with government guarantee outstanding Credits according to lending currency: (Face value in EUR 1,000) EUR-credits SDR-credits Total, outstanding credits

31 Dec. 2013 469,734 270,840 740,574

31 Dec. 2012 468,996 289,790 758,786

31 Dec. 2013 29,490 18,412 28,959 4,603 10,204 9,262 1,877 4,448 1,104 7,116 25,226 47,696 30,723 10,457 5,308 25,969 4,396 51,321 20,994 8,970 2,599 59,594 24,367 1,617 19,707 43,637 9,724 13,709 12,499 46,192 19,217 22,934 5,059 53,821 25,330 22,239 15,344 744,122 3,548 740,574

31 Dec. 2012 28,586 18,721 30,341 4,862 10,204 9,262 2,007 4,559 1,179 7,666 26,429 47,338 31,562 11,385 5,721 25,969 4,497 52,557 22,185 9,275 2,761 61,319 25,441 1,656 19,366 45,820 10,151 14,469 12,499 48,998 20,298 23,079 5,182 55,596 24,408 20,704 16,010 762,066 3,280 758,786

In addition, agreements have been signed on a further EUR 16 million (2012: EUR 33 million) in credits not yet disbursed.

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Amortisations on credits outstanding as at 31 December 2013 show the following maturity profile:

(Note 5) Loans with equity features and equity investments outstanding

(EUR 1,000) 31 Dec. 2013 2013 2014-2015 38,020 2016-2020 119,187 2021-2025 148,294 2026-2030 164,475 2031-2035 141,167 2036-2040 93,677 2041-2045 35,754 Total, credits outstanding 740,574

Loans with equity features and equity investments are distributed as follows:

31 Dec. 2012 15,102 38,388 120,039 150,054 165,754 142,161 93,535 33,752 758,786

(Note 4) Other loans outstanding Other loans outstanding are distributed as follows: (EUR 1,000) 31 Dec. 2013 31 Dec. 2012 East African Development Bank 5,602 6,150 Total, other loans outstanding 5,602 6,150 Amortisations on other loans outstanding as at 31 December 2013 show the following maturity profile: (EUR 1,000) 31 Dec. 2013 2013 2014-2015 410 2016-2020 1,366 2021-2025 1,366 2026-2030 1,366 2031-2035 1,093 Total, other loans outstanding 5,602

31 Dec. 2012 547 410 1,366 1,366 1,366 1,093 6,150

(EUR 1,000) 31 Dec. 2013 Mekong Enterprise Fund 538 Nepal 2,913 ECP 0 Central American Small Enterprise Investment Fund 561 Aureos Southern Africa Fund 503 Aureos West Africa Fund 0 Total, loans with equity features and equity investments outstanding 4,514 Write-down -400 Total, loans with equity features and equity investments outstanding after write-down 4,114

31 Dec. 2012 1,103 2,913 5 765 602 102 5,489 -1,371

4,118

As at 31 December 2013, the write-down for impairment totalled EUR 400,458 (2012: EUR 1,370,982) based on assessment of the risk of losses which exists or may exist. The reversals for 2013 of previously made provisions for credit losses amounted to a total of EUR 970,523.

(Note 6) Loan losses, write-down of loans and reversals The total net loan losses, write-down on loans and reversals during 2013 totalled EUR -970,523 (2012: EUR 132,816). No realised loan losses occurred during 2013 (2012: EUR 1,593,742).

(Note 7) Intangible and tangible assets (Amounts in EUR) 2013 2012 Computer Computer Intangible assets software software Acquisition value at beginning of year 5,797 5,527 Acquisitions during the year 0 270 Acquisition value at end of year 5,797 5,797 Accumulated amortisation at beginning of year 5,575 5,249 Amortisation according to plan for the year 90 325 Accumulated amortisation at end of year 5,665 5,575 Net book value 132 222 Office Office Tangible assets equipment equipment Acquisition value at beginning of year 47,670 33,498 Acquisitions during the year 9,822 14,172 Acquisition value at end of year 57,492 47,670 Accumulated depreciation at beginning of year 22,678 12,280 Depreciation according to plan for the year 8,185 10,398 Accumulated depreciation at end of year 30,863 22,678 Net book value 26,629 24,992 Intangible and tangible assets total 26,761 25,214

(Note 8) Equity The total Fund capital amounts to SDR 515 million and EUR 330 million. Of this, the paid-in capital as of 31 December 2013 amounted to SDR 515 million*) (equivalent to EUR 691.4 million) and EUR 290.9 million i.e. a total of EUR 982.3 million. The payments by the member countries in 2013 amounted to EUR 19.5 million in total. *) The EUR value of SDR is based on the historic EUR/SDR currency rate on the date of payment.

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

The member countries have subscribed the following amounts of the total Fund capital: Subscribed fund capital as at 31 December 2013 (EUR 1,000) Denmark Finland Iceland Norway Sweden Subscribed fund capital

SDR 115,067 96,726 5,453 101,591 196,163 515,000

% 22% 19% 1% 20% 38% 100%

EUR 82,500 58,740 3,300 74,250 111,210 330,000

% 25% 18% 1% 23% 34% 100%

The member countries have paid in the following amounts of the total fund capital: Fund capital Fund capital Paid-in Fund capital (EUR 1,000) 31 Dec. 2012 in SDR Translated into EUR 31 Dec. 2012 in EUR Denmark 115,067 153,858 67,858 Finland 96,726 130,592 48,315 Iceland 5,453 7,303 2,713 Norway 101,591 136,354 61,073 Sweden 196,163 263,299 91,472 Paid-in fund capital 515,000 691,405 271,431

Fund capital 31 Dec. 2012 Total 221,716 178,907 10,016 197,427 354,771 962,836

% 23% 19% 1% 20% 37% 100%

Paid-in fund capital (EUR 1,000) Paid-in during 2013 in SDR Translated into EUR Paid-in during 2013 in EUR Paid-in total during 2013 Denmark 0 0 4,875 4,875 Finland 0 0 3,471 3,471 Iceland 0 0 195 195 Norway 0 0 4,388 4,388 Sweden 0 0 6,572 6,572 Paid-in fund capital 0 0 19,500 19,500

Fund capital Fund capital Paid-in Fund capital (EUR 1,000) 31 Dec. 2012 in SDR Translated into EUR 31 Dec. 2012 in EUR Denmark 115,067 153,858 72,733 Finland 96,726 130,592 51,786 Iceland 5,453 7,303 2,908 Norway 101,591 136,354 65,461 Sweden 196,163 263,299 98,043 Paid-in fund capital 515,000 691,405 290,931

Fund capital 31 Dec. 2012 Total 226,591 182,378 10,211 201,814 361,342 982,336

% 23 % 19 % 1% 21 % 37 % 100 %

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

(Note 9) Grant financing for climate projects Disbursements for grant financing for climate projects amounted to EUR 27.3 million in 2013 (2012: EUR 27.1 million). The geographic distribution is as follows: (EUR 1,000) Africa Asia Global Latin America

31 Dec. 2013 2,087 8,659 4,042 12,511 27,300

31 Dec. 2012 4,089 2,801 6,038 14,191 27,119

In addition, agreements have been signed on a further EUR 91 million (2012: EUR 78.7 million) in grant financing but not yet disbursed.

(Note 10) General administrative expenses including compensation for the Board of Directors, the Control Committee and the Managing Director

Professional staff (including the Managing Director) who move to Finland for the sole purpose of taking up employment in the Fund, are entitled to certain expatriate benefits, such as an expatriate allowance and a spouse allowance. In addition, NDF assists the expatriate in finding a residence and in other practical arrangements. Such staff members are required to reimburse the Fund part of the rent equivalent to the minimum tax value of the accommodation benefit received. The tax value is determined annually by the Finnish tax authorities. Compensation for the Chairman of the Board of Directors, the Board, the Control Committee and the Managing Director appears from the table below:

2013 2012 Compensation/ Compensation/ (amounts in EUR) taxable income taxable income Chairman of the Board of Directors 5,325 5,325 Other members of the Board 18,179 18,624 1) 332,331 Managing Director 274,323 Control Committee 1,170 1,969 1)

Compensation/taxable income regarding year 2012 consists of compensation/taxable income for the former Managing

Director for the period 1.1-31.10.2012 and for the present Managing Director for the period 1.11-31.12.2012.

General administrative expenses (EUR 1,000) Personnel costs Pension premiums in accordance with the Finnish state pension system Other pension premiums Office premises costs Other general administrative expenses Cost coverage, NIB Total Host country reimbursement according to agreement with the Finnish Government Net

2013

2012

1,598

1,671

350 82 166 810 277 3,284

340 53 160 1,099 289 3,612

-464 2,820

-414 3,199

Compensation for the Board of Directors and the Control Committee is set by the Nordic Council of Ministers. Compensation for the Fund’s Managing Director is set by the Board of Directors and is paid in the form of a fixed annual salary and usual salary-based benefits. The Managing Director is permitted to borrow from a commercial bank at interest rates that are the same for all of the Fund’s employees. The rates are set with reference to the so-called base rate determined periodically by Finland’s Ministry of Finance. The pension benefits for the Managing Director are based on the Finnish State pension system, with certain additions.

During 2013, NDF paid a total of EUR 82,846 (2012: EUR 110,205) in pension premiums for the Managing Director.

(Note 11) Transactions between closely related partners NDF receives services and enters into transactions with NIB. The outstanding claims and debts between NDF and NIB as well as interest charged during the year are presented in the table below. The interest charged corresponds to the normal market rate (EUR 1,000): Interest collected NDF’s outstanding debt to NIB NDF’s outstanding claim on NIB 2013 1 29 42,462 2012 51 2 88,450

(Note 12) Currency exchange rates DKK ISK NOK SEK USD SDR

EUR rate on 31 Dec. 2013 EUR rate on 31 Dec. 2012 Danish krone 7.4593 7.461 Icelandic króna 158.15 170.2 Norwegian krone 8.363 7.3483 Swedish krona 8.8591 8.582 US dollar 1.3791 1.3194 Special Drawing Rights 0.895* 0.85776*

* The exchange rate is calculated in such a way that the market rate for USD/relevant currency provides the EUR/relevant currency rate. The exchange quotation USD/relevant currency is per 31 December 2013.

A U D I T O R S ’ R E P O RT

INDEPENDENT AUDITORS’ REPORT TO THE CONTROL COMMITTEE OF

ment, including the assessment of the risks of material misstatement of the financial

THE NORDIC DEVELOPMENT FUND

statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the

Independent Auditors’ report on the financial statements

financial statements in order to design audit procedures that are appropriate in the

In our capacity as auditors appointed by the Control Committee of the Nordic Development

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

Fund we have audited the accompanying financial statements of the Fund, which comprise

entity’s internal control. An audit also includes evaluating the appropriateness of accounting

the balance sheet as at 31 December 2013, and the income statement, statement of changes in

policies used and the reasonableness of accounting estimates made by management, as well

equity and statement of cash flows for the year then ended, and a summary of significant ac-

as evaluating the overall presentation of the financial statements.

counting policies and other explanatory notes. We believe that the audit evidence we have obtained is sufficient and appropriate to provide

The Board of Directors’ and the Managing Director’s responsibility for the financial statements

a basis for our audit opinion.

The Board of Directors and the Managing Director are responsible for the preparation of the financial statements in accordance with the accounting principles described in the notes to the

Opinion

financial statements and for such internal control as they determine is necessary to enable the

In our opinion, the financial statements, which comprise the balance sheet as at 31 December

preparation of financial statements that are free from material misstatement, whether due to

2013, and the income statement, statement of changes in equity and statement of cash flows for

fraud or error.

the year then ended, and a summary of significant accounting policies and other explanatory notes, are prepared in all material respects in accordance with the accounting principles described in

Auditor’s responsibility

the notes to the financial statements.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards

Report on the other requirements

require that we comply with ethical requirements and plan and perform the audit to obtain

In accordance with the Terms of Engagement our audit also included a review of whether the

reasonable assurance whether the financial statements are free from material misstatement.

Board of Directors’ and the Managing Director’s administration have complied with the Statutes

An audit involves performing procedures to obtain audit evidence about the amounts and

of the Fund. It is our opinion that the administration of the Board of Directors and the

disclosures in the financial statements. The procedures selected depend on the auditor’s judg-

Managing Director complied with the Statutes of the Fund.

Helsinki, 6 March 2014 SIXTEN NYMAN

PER GUNSLEV

Authorised Public Accountant

State Authorised Public Accountant

KPMG Oy Ab

KPMG, Statsautoriseret Revisionspartnerselskab

Mannerheimintie 20 B

Osvald Helmuths Vej 4

00100 Helsinki

2000 Frederiksberg

Finland

Denmark

A U D I T O R S ’ R E P O RT

STATEMENT BY THE CONTROL COMMITTEE OF THE NORDIC DEVELOPMENT FUND ON

Following the audit performed, we note that:

THE AUDIT OF THE ADMINISTRATION AND ACCOUNTS OF THE FUND

• the Fund’s operations during the financial year have been conducted in accordance

To the Nordic Council of Ministers

• the financial statements, which comprise the balance sheet as at 31 December 2013,

with the Statutes, and that and the income statement, statement of changes in equity and statement of cash In accordance with section 9 of the statutes of the Nordic Development Fund, we have been

flows for the year then ended, and a summary of significant accounting policies

appointed to ensure that the operations of the Fund are conducted in accordance with the

and other explanatory notes, are prepared in all material respects in accordance with

Statutes and to bear responsibility for the audit of the Fund. Having completed our assignment

the accounting principles described in the notes to the financial statements. The

for the year 2013, we hereby submit the following report.

financial statements show a loss of EUR 31,061,838.74, which will be carried forward to new account.

The Control Committee met during the financial year as well as after the Fund’s financial statements had been prepared, whereupon the necessary control and examination measures

We recommend to the Nordic Council of Ministers that:

were performed. The Fund’s Annual Report was examined at a meeting in Helsinki on 6

• the income statement and the balance sheet be adopted, and

March 2014, at which time we also received the Auditor’s Report submitted on 6 March 2014

• the Board of Directors and Managing Director be discharged from liability for the

by the authorised public accountants appointed by the Control Committee.

administration of the Fund’s operations during the accounting period examined by us.

Helsinki, 6 March 2014 BILL FRANSSON

THOMAS JENSEN

HANS FRODE KIELLAND ASMYHR

ÅSA TORSTENSSON

TUULA PELTONEN RAGNHEIÐUR RIKHARÐSDÓTTIR

G R A N T P O RT F O L I O

160 140 120 100 80 60 40 20 0 mEUR

60 50

40 25

30 20

1 -09

Cumulative volume

0 -10

-11

-12

Cumulative volume 2013

-13

number

Cumulative amount

Signed Grant Agreements;

SignedVolume Grant Agreements; Volume mEUR and number (cumulative) mEUR and number (cumulative)

AFRICA

Country/ Lead Investment Year of Project Agency million, NDF signing Benin Increased Access to Modern Energy Project Modernizing Biomass Energy Services IDA 1.5 EUR 2010 Ghana Studies on Landfill Gas Capture and Utilization IDA 2.0 EUR 2011 Greater Accra Septage Digesters Project IDA 2.5 EUR 2014* Kenya Electricity Expansion Project IDA 4.0 EUR 2012 Training in Geothermal Drilling IDA 1.5 EUR 2014* Mozambique Coastal Cities and Climate Change IDA 3.8 EUR 2012 Transforming Hydro-Meteorological Services IDA 4.5 EUR 2013 Scalable Community-Managed Climate Change Adaptive Solutions IDA 4.0 EUR 2013 Developing Capacity for a Climate Resilient Road Sector AfDB 3.8 EUR 2014* Rwanda Promotion of Solar Water Heaters IDA 4.0 EUR 2011 Senegal Transport and Urban Mobility Project Environmental Activities IDA 4.0 EUR 2011 Water and Sanitation Millennium Project Cambérène Climate Change IDA 4.0 EUR 2011 Senegal Biomass IDA 3.0 EUR 2011 Flood Risk Management IDA 3.0 EUR 2013 Tanzania Impacts of Climate Change in Coastal Areas IDA 0.8 EUR 2012 Hydropower Sustainability Assessment IDA 0.5 EUR 2013 Climate Smart Solutions for Water and Energy IDA 0.5 EUR 2014* Uganda Increasing Access to Modern Energy Packages in Rural Areas IDA 3.0 EUR 2010 Zambia Developing Climate resilient Infrastructure and Capacity IDA 4.0 EUR 2014*

Regional Distribution of Approved Financing EUR 174.1 million

Distribution by Lead Agency

Regional (Africa) Africa Regional - Addressing the Vulnerability of Africa’s Infrastructure IDA 0.6 EUR 2012 Insurance Instruments for Africa Climate Adaptation IDA 0.5 EUR 2012 Sub-Saharan Drylands – Towards enhanced resilience IDA 0.5 EUR 2012 Geothermal Exploration Project in East Africa Iceida 5.0 EUR 2012

ASIA Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Cambodia Adaptation Approaches for the Transport Sector ADB 4.2 EUR 2011 Water Resources Management ADB 3.0 EUR 2011 Lao PDR Pakse Urban Environmental Improvement Project ADB 0.4 EUR 2009 Capacity Enhancement for Coping with Climate Change ADB 2.0 EUR 2010 Nepal Pilot Project to Test the Climate Change Benefits of Biochar ADB 0.5 EUR 2013 Building Climate Resilience of Watersheds in Mountain Eco-Regions ADB 3.6 EUR 2014* Vietnam Support for the National Target Program on Climate Change ADB 2.2 EUR 2011 Vietnam Climate Proofing of Roads ADB 2.0 EUR 2012 Pilot Programme for Mitigation Action in NOAK/Nefco 1.5 EUR 2013 the Cement Sector Low Carbon Agricultural Support through Biogas Expansion ADB 4.1 EUR 2014* Regional (Asia) Mekong Energy and Environment Partnership (EEP) UM Finland 3.0 EUR 2010 GMS Bioenergy ADB 3.1 EUR 2011 Gender and Climate Change ADB 2.0 EUR 2011 Resilient Cities in the GMS: Adapting Cities to Climate Change ADB 0.5 EUR 2012 Climate Resilience and Low Carbon Strategies in GMS ADB 4.0 EUR 2013 Improving Nitrogen Use Efficiency for Climate Change Mitigation and Adaptation ADB 3.7 EUR 2013

G R A N T P O RT F O L I O

GLOBAL

L AT I N A M E R I C A Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Bolivia Rural Electrification with Renewable Energy IDB 4.0 EUR 2014* Pilot Adaptation Plan of Action for High Inter-Valley Communities IDB 4.0 EUR 2014* Honduras Indigenous Peoples and Climate Change IDB 3.5 EUR 2012 Asset Adaptation to Climate Change IDB 0.2 EUR 2013 Nicaragua Sustainable Electrification and Renewable Energy Program IDB 4.5 EUR 2011 Programme for Disaster Management and Climate Change IDB 2.5 EUR 2011 Biogas Market Facilitation Program IDB/MIF 1.5 EUR 2011 Adaptation to Climate Change in Road Transport Sector IDB 4.4 EUR 2012 Regional (LAC) GreenPYME: Energy Efficiency for Small and Medium-sized Enterprises IIC 2.2 EUR 2010 Climate Proofing and Review of Infrastructure Investments IDB 1.5 EUR 2011 Central America: Adaptation to Climate Change in Honduras and Nicaragua IDB 0.5 EUR 2011 Regional Microfinance and Climate Change Programme IDB/MIF 1.5 EUR 2011 Central America - Regional Centre for Geothermal Energy IDB 1.5 EUR 2012 Economics of Climate Change IDB 0.5 EUR 2012 GreenPyme II IIC 3.0 EUR 2012 Latin America - Climate Change and Sustainable Cities IDB 2.1 EUR 2012 Energy Efficiency Technical Assistance and Guarantee Fund IDB 10.0 EUR 2013 Building Climate Resilience in MSMEs IDB 3.5 EUR 2013 IDEAS Energy Innovation Contest IDB 0.2 EUR 2013

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Nordic Climate Facility 1 n/a 6.0 EUR 2010 Nordic Climate Facility 2 n/a 6.0 EUR 2011 Nordic Climate Facility 3 n/a 6.0 EUR 2011 Nordic Climate Facility 4 n/a 4.0 EUR 2013 Social Analysis and Adaptation to Climate Change None 0.2 EUR 2012 *) tentative

C R E D I T P O RT F O L I O

AFRICA

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Public Sector Projects Benin Transport Sector Investment IDA 4.7 SDR 1997 Energy Services Delivery IDA 13.8 EUR 2005 Burkina Faso Power Sector Development IDA 10.2 EUR 2005 Botswana Mochudi-Molepolole Groundwater Exploitation NIB 1.1 EUR 1990 AfDB/NIB 0.5 EUR 1992 Trans-Kgalagadi Road Transmission Line Francistown-Maun NIB 5.0 EUR 1993 Cape Verde Integrated Fisheries Development ICEIDA 2.0 SDR 1994 Ethiopia Addis Ababa Airport Improvement EIB 5.0 SDR 1998 Energy II IDA 7.0 SDR 1998 Road Sector Development IDA 4.8 SDR 1998 Road Sector Development II IDA 8.6 EUR 2003 Ghana Urban II IDA 5.2 EUR 1994 National Electricity IDA 6.1 EUR 1994 Accra Tema Water Supply Rehabilitation AfDB 5.2 EUR 1994 Urban Environment Sanitation IDA 2.6 EUR 1996 Mining Sector Development and Environment IDA 4.0 SDR 1996 Health Sector Support IDA 5.0 SDR 1998 Urban V IDA 2.1 SDR 2000 Health Services Rehabilitation III AfDF 8.3 EUR 2003 Land Administration IDA 7.0 EUR 2004 Urban Water Project IDA 6.0 EUR 2004 Urban Environment Sanitation II IDA 6.8 EUR 2004 Kenya Northern Transport Corridor Improvement IDA 16.0 EUR 2004 Energy Sector Recovery IDA 10.0 EUR 2004

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Malawi Fisheries Development IDA 2.8 EUR 1991 National Water Development IDA 5.3 SDR 1995 Power V IDA 5.0 SDR 1997 Preparatory Programme to Support the Telecommunications Sector Danida 5.1 EUR 1998 Road Maintenance and Rehabilitation (ROMARP) IDA 4.8 SDR 1999 Mauritius Environmental Investment for Sustainable Development IBRD 4.1 EUR 1990 Mozambique Urban Household Energy IDA 5.6 EUR 1989 Cahora Bassa Interconnection NORAD 4.6 EUR 1994 Danida/ICEIDA 3.6 SDR 1996 Semi Industrial Fisheries National Water Development IDA 5.2 SDR 1997 Municipal Development IDA 3.4 SDR 2001 Mineral Resources Management Capacity Building IDA 12.6 EUR 2001 The Roads and Bridges Management and Maintenance IDA 11.7 EUR 2001 Agricultural Sector Public Expenditure (PROAGRI) IDA 7.2 EUR 2002 Energy Reform and Access (ERAP) IDA 10.1 EUR 2003 Namibia Seaflower - Whitefish Corporation NIB 2.0 EUR 1994 Rwanda Urgent Electricity Rehabilitation IDA 7.5 EUR 2005 Urban Infrastructure and City Management IDA 5.0 EUR 2005 Senegal Womenâ&#x20AC;&#x2122;s Groups Support AfDB 4.3 EUR 1992 Water Sector IDA 6.1 EUR 1995 Integrated Health Sector Development IDA 5.0 SDR 1997 Second Transport Sector IDA 2.1 SDR 1999 Long Term Water Sector Project Water Resources Management IDA 3.7 SDR 1999 Poverty Alleviation AfDB 7.5 SDR 1999 Quality Education for All IDA 1.9 SDR 2000

C R E D I T P O RT F O L I O

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Long Term Water Sector Project Urban Sanitation, ThiĂ¨s IDA 11.5 SDR 2000 Urban Mobility Improvement IDA 5.3 SDR 2002 Tanzania Electricity IV AfDB 6.1 EUR 1993 Power VI IDA 6.0 EUR 1995 Mineral Sector Development Technical Assistance IDA 6.7 SDR 1999 Songwe River Stabilisation Study IDA 1.3 EUR 1999 Central Transport Corridor Roads IDA 4.1 EUR 2004 The Lake Tanganyika Integrated Regional Development (PRODAP) AfDF 1.4 EUR 2005 Tunisia Second Forestry Development IBRD 4.4 EUR 1994 Water Supply and Sewerage IBRD 1.8 EUR 1996 Uganda Second Power - Installation of SCADA System IDA 4.9 EUR 1990 First Urban IDA 5.8 EUR 1991 Third Power - Owen Falls Extension IDA 5.8 EUR 1994 Transport Rehabilitation IDA 4.4 EUR 1994 Northern Reconstruction Telecommunications component IDA 5.0 SDR 1998 Second Economic and Financial Management (EFMP2) IDA 3.2 SDR 2000 Roads Development Program, Phase II (RDPPII) IDA 7.0 SDR 2001 Fourth Power IDA 12.7 EUR 2002 Sustainable Management of Mineral Resources (SMMRP) IDA 5.9 EUR 2005 Farm income Enhancement and Forest Conservation Project AfDF 5.0 EUR 2006 Zambia Environment Support IDA 0.9 EUR 1997 Power Rehabilitation IDA 6.1 EUR 1999 Copperbelt Environment IDA 9.6 EUR 2003 Road and Rehabilitation and Maintenance Project - In Support of ROADSIP II (Phase I) IDA 8.0 EUR 2004 Zimbabwe Urban Sector and Regional Development IBRD 4.4 SDR 1990 Cahora Bassa Interconnection NORAD 3.5 SDR 1994 Pungwe Mutare Water Transfer Sida 5.9 SDR 1996

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Private Sector Projects Loans with equity features Benin Cimbenin S.A. Swedfund 0.7 SDR 1996 Ghana Paper Conversion Company Ltd. Swedfund 0.5 SDR 1995 Ghana Emulsion Company Ltd. IFU 0.4 SDR 1996 Danafco Ltd. IFU 0.2 SDR 1998 Mozambique Maputo Port Privatisation and Rehabilitation Swedfund 0.9 SDR 2003 Namibia Seaflower Whitefish Corporation Ltd. NBVF 0.7 SDR 1999 South Africa Nielsen Tap (Pty) Ltd. IFU 0.1 SDR 1995 Princeton Computing Training Solutions (Pty) Ltd. IFU 0.02 SDR 1996 New Africa Signs and Graphics (Pty) Ltd. IFU 0.04 SDR 1997 Danforge Engineering (Pty) Ltd. IFU 0.04 SDR 1998 Tanzania Sao Hill Timber Ltd. Norfund 0.3 SDR 1997 Uganda MTN (Uganda) Ltd. Swedfund 1.5 SDR 1999 Zimbabwe Imperial Derby Refrigeration Ltd. IFU 1.0 SDR 1995 Oscars Fine Foods IFU 0.1 SDR 1995 Frese (Zimbabwe) (Pvt) Ltd. IFU 0.3 SDR 1996 Powervision (Pvt) Ltd. IFU 0.1 SDR 1997 Regional African Infrastructure Fund Swedfund 1.5 SDR 1999 Aureos Southern Africa Fund (ASAF) Norfund 3.4 EUR 2003 Aureos West Africa Fund Norfund 3.0 EUR 2004 Credit Lines Fifth Line of Credit and Technical Assistance to the East African Development Bank AfDB 6.8 EUR 1995 Second NDF Credit Line to the East African Development Bank (EADB) n/a 4.2 EUR 2003

C R E D I T P O RT F O L I O

ASIA Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Public Sector Projects Bangladesh KAFCO IFU 4.0 SDR 1993 Jamuna Bridge Access Roads ADB 1.5 SDR 1997 Urban Primary Health Care ADB 1.2 SDR 1998 Southwest Road Network Development ADB 2.7 SDR 2000 West Zone Power System Development ADB 10.0 EUR 2002 Dhaka Clean Fuel Project ADB 9.4 EUR 2003 Power Sector Development ADB 8.3 EUR 2004 Cambodia Greater Mekong Subregion (GMS) Transmission ADB 9.3 EUR 2004 China Beishigiao Wastewater Treatment Plant, Xiâ&#x20AC;&#x2122;an City NIB 1.6 EUR 1993 Hedong Wastewater Treatment Plant, Urumqi City NIB 3.1 EUR 1993 Tanggu Geothermal Plant NIB 0.8 EUR 1994 Indonesia Central Nurseries Establishment NIB 3.9 SDR 1990 Indonesia/Nordic Forestry NIB 3.8 SDR 1993 Digital Marine Mapping NORAD 5.0 SDR 1995 Kyrgyz Republic Power and District Heating Rehabilitation ADB 5.1 EUR 1997 Lao PDR Highways Improvement IDA 4.8 EUR 1991 Airports Improvement ADB 5.7 EUR 1994 Bridge Construction Sida 6.0 EUR 1994 Theun Hinboun Hydropower ADB 6.0 EUR 1995 Third Highway Improvement IDA 3.9 SDR 1997 Power Transmission and Distribution ADB 6.4 EUR 1997 Road Maintenance IDA 4.5 SDR 2001 Northern Area Rural Power Distribution ADB 12.3 EUR 2003 Roads For Rural Development ADB 7.4 EUR 2004

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Maldives Third Fisheries IDA 4.2 EUR 1992 Male-Water and Sewerage IFU 2.1 EUR 1995 Third Power System Development ADB 4.7 EUR 1998 Mongolia Telecommunications ADB 4.9 SDR 1994 Power Rehabilitation ADB 3.9 SDR 1995 Transport Infrastructure Development IDA 3.8 SDR 2001 Social Security Sector Development, SSSDP ADB 4.4 EUR 2001 Second Education Development ADB 8.5 EUR 2002 Nepal Power Sector Efficiency IDA 5.1 EUR 1992 Fifth Telecommunication IDA 5.8 EUR 1993 Biratnagar II Multifuel Power Plant Extension Finland 5.4 EUR 1996 Khimti Power Transmission Finland 1.7 EUR 1997 Melamchi Water Supply ADB 7.5 EUR 2001 Pakistan NLC - Radio Link NIB 3.3 EUR 1993 WAPDA Twelfth Power Sector ADB 6.9 EUR 1993 Provincial Highway ADB 4.3 EUR 1994

C R E D I T P O RT F O L I O

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Philippines Industrial Restructuring IBRD 2.8 EUR 1992 Leyte-Cebu Geothermal IBRD 4.2 EUR 1995 Local Government Units (LGU), Urban Water and Sanitation IBRD 0.6 SDR 1998 Mindanao Basic Urban Services Sector ADB 4.3 SDR 2000 Technical Education and Skills Development ADB 5.0 SDR 2000 Sri Lanka Second Power Distribution and Transmission IDA 5.4 EUR 1996 Southern Transport Development ADB 3.7 SDR 1999 Skills Development ADB 6.3 SDR 1999 Secondary Education Modernization ADB 4.5 SDR 2000 Vietnam Song-Hinh Hydropower Sida 7.4 EUR 1996 Vocational and Technical Education ADB 4.3 SDR 1999 Bai Bang Paper Mill Sida 5.9 EUR 2001 Central Region Transport Network ADB 9.0 EUR 2005

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Private Sector Projects Loans with equity features Bangladesh Scancement International Norfund 1.4 SDR 2000 China Scana Leshan Machinery Company Limited IFC 1.6 SDR 1999 Nepal Khimti Hydropower ADB / IFC 2.1 SDR 1996 Thailand Thailand Research Test Center (TRTC) Norfund 0.3 SDR 1998 Regional Mekong Enterprise Fund Ltd. (MEF) ADB 3.4 EUR 2002

C R E D I T P O RT F O L I O

L AT I N A M E R I C A A N D T H E C A R I B B E A N Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Public Sector Projects Bolivia Energy Generation, Transmission and Distribution IDB 4.8 EUR 1991 Environment, Industry & Mining IDA 5.0 SDR 1995 National Land Administration IDA 5.0 SDR 1996 Ventilla - Tarapaya Highway IDB 2.6 SDR 1999 Institutional Reform Project (IRP) IDA 1.3 SDR 2000 Bolivian Epidemiological Shield and Support for Health-Sector Reform Program IDB 5.0 SDR 2000 Road Rehabilitation and Maintenance IDA 4.8 EUR 2002 Environmental and Social Protection in the - Santa Cruz-Puerto SuĂ rez Corridor IDB 2.5 EUR 2002 Colombia Pacific Coast Sustainable Development IDB 1.4 SDR 1997 Dominican Republic Energy Control Center / SCADA System IDB 5.1 SDR 1993 Health Sector Modernization and Restructuring IDB 2.7 SDR 1998 Honduras Road Reconstruction and Improvement IDA 7.8 SDR 2000 Potable Water and Sanitation Investment IDB 1.5 SDR 2000 National Education Reform IDB 7.0 EUR 2001 Three National Sustainable Development Program for - Upper Lempa River Basin IDB 3.4 EUR 2002 Land Administration IDA 5.6 EUR 2005 Support for Rural Electrification and the Energy Sector IDB 5.6 EUR 2005 Jamaica Primary Education Improvement IDB 2.0 SDR 1993 Multisectoral Pre-investment IDB 1.8 SDR 1994 Airport Reform and Improvement IDB 2.0 SDR 1997

Country/ Project

Lead Agency

Investment million, NDF

Year of signing

Nicaragua Electric Power System Rehabilitation IDB 2.7 SDR 1992 Rehabilitation of the Water Supply & Sewerage Systems IDB 4.8 SDR 1992 Rural Road Rehabilitation and Upgrading IDB 4.0 SDR 1993 Forestry Resource Management and Conservation IDB 3.2 SDR 1996 Management of Lake Managua IDB 6.9 SDR 1997 Atlantic Biological Corridor IDA 2.3 SDR 1997 Health Sector Modernization II IDA 2.5 SDR 1999 Road Yalaguina - Las Manos, Rehabilitation and Improvement Sida 3.0 SDR 2000 Socioenvironmental and Forestry Development Program II - (POSAF II) IDB 2.5 EUR 2002 Land Administration IDA 4.6 EUR 2003 Transport Program for Improved Competition IDB 9.5 EUR 2004 Private Sector Projects Loans with equity features Colombia Owens Corning Andercol Tuberias S.A. NORAD 1.4 SDR 1996 Regional Central American Small Enterprise Investment Fund (CASEIF) Norfund 3.1 EUR 2003

Photo: Kim Forss

441 014 Printed matter

Nordic Development Fund • Annual Report 2013 • Lay-out: Kubik advertising Photos: Chandra Mand Dangol, Kim Forss and Dreamstime • Printed by Libris, Finland

Chandra Mand Dangol / Wildlife Conservation Nepal. Danish Forestry Extensionâ&#x20AC;&#x2122;s NCF3 community based mitigation and adaption project in Nepal.

Nordic Development Fund (NDF) P.O. Box 185 FIN-00171 Helsinki, Finland Offices: Fabianinkatu 34 Telephone +358 10 618 002 Telefax +358 9 622 1491 E-mail: info.ndf@ndf.fi Internet: http://www.ndf.fi