Creating long-term development impact.
Our strategic approach to development Finance is laying the foundations for change
SIFEM is Switzerland’s Development Finance Institution (DFI). DFIs invest in private sector businesses, banks, and projects in low- and middle-income countries to stimulate job creation and foster sustainable economic development.
DFIs, self-financing bodies and typically majority-owned by national governments, reinvest profits from their investments. Expansion of operations may necessitate additional capital infusion from the government.
Addressing today’s most pressing global challenges, like poverty alleviation and climate change mitigation, demands significant private investment. However, in many regions, businesses and projects may appear too risky for private investors. DFIs play a crucial role in bridging such financing gaps, as they are willing to assume higher commercial risks to support profitable businesses with positive developmental impacts. Concurrently, DFIs facilitate the mobilization of private capital from diverse sources such as commercial banks, investment funds, and institutional investors.
The Swiss Federal Council is responsible for defining SIFEM’s Strategic Objectives for a four-year period, which serve as guidelines for our investment activities.
The current objectives are defined in Strategic Objectives 2021-24 of the Federal Council for SIFEM AG and summarized below.
Strategic areas of focus:
SIFEM is taking measures to limit the negative impact of the Covid-19 crisis on its financial and impact results and to maintain the value of its portfolio. To this end, it may provide financial and advisory support to existing funds, financial intermediaries and portfolio firms that combine proven business models, social responsibility and proven development impact.
In addition to other economic development cooperation measures of the Confederation, SIFEM contributes to growth in developing countries and emerging economies by promoting the flourishing of the local private sector.
SIFEM focuses on the preservation and creation of decent jobs as well as the maintenance of decent working conditions and the strengthening of professional skills. Decent jobs are central to poverty reduction and social inclusion in developing countries and emerging economies and are an alternative to irregular migration.
Based on internationally recognised environmental, social and governance criteria, SIFEM supports the development of sustainable and responsible companies in developing countries and emerging economies.
SIFEM strengthens the resilience of these countries and companies to global risks such as pandemics and the impacts of climate change.
SIFEM contributes to the achievement of international environmental goals and, in particular, to mitigating climate change and its negative consequences.
SIFEM promotes gender equality through the economic empowerment of women.
SIFEM strives to meet the highest standards of integrity, transparency and professionalism, and accordingly enjoys a good reputation and high reputation among the public.
SIFEM’s activities shall contribute primarily to the following UN Sustainable Development Goals:
We are called to align our investment activities with the following priorities:
In its investment activities, SIFEM adheres to the principles of financial, economic, social and environmental sustainability and responsible corporate governance. Investments are in compliance with its Responsible Investment Policy and the Paris Agreement.
SIFEM provides financing that cannot be obtained from the private financial markets on reasonable terms or in sufficient quantities for comparable development purposes without public support. At least half of the investments are supposed to support long-standing partners and to enable the launch of new funds by committing in the 1st closing.
In addition to financial means, SIFEM provides or mobilises non-financial support to financial intermediaries and companies, which is intended to increase the development effects. Accordingly, SIFEM acts as an active investor by taking a seat on the governance boards of the funds or financial institutions whenever possible. It can access SECO’s Technical Assistance Faciliy to provide non-financial support such as know-how transfer, the promotion of social and environmental standards, the improvement of corporate governance or professional skills.
SIFEM aims to directly mobilise additional funds from private and institutional investors who would otherwise not invest. In this way, it contributes additional resources to sustainable development.
SIFEM focuses its activities on the priority countries and regions of Swiss development cooperation where at least 60% of the annual investment volume should flow. At least 15% of the investments should be allocated to least developed countries (LDCs).
SIFEM is a member of the Association of European Development Finance Institutions (EDFI), an alliance of 15 European bilateral development finance organisations.
EDFI’s mission is to foster cooperation by EDFI members amongst each other and with the European Union, improve member efficiency and effectiveness, provide them with common representation, develop and support joint policies, and secure financing opportunities. Furthermore, EDFI serves to inform the public and government stakeholders about the DFIs’ role and contribution to development.Â
Through our membership, we actively contribute to harmonising ESG and impact standards, fostering greater effectiveness and scalability in development finance. Collaboration with other DFIs and multilateral bodies is essential in achieving our strategic objectives, making this membership a vital component of our strategy.
Get to know our internal and external guidelines.
