NDF - Financing for climate change and development projects

How NDF finances

NDF flexibly uses grants, loans and equity or combination of these financial instruments for climate change investments in low-income countries which

  • are eligible for support from IDA (less than USD 1,165 per capita income in 2016), and
  • have previously received NDF support.

Generally, both these criteria should be fulfilled. Under certain conditions, NDF may also provide assistance to other low-income and lower middle-income countries on a case by case basis.

Identification of projects

Projects are normally identified by governments in partner countries according to national priorities. NDF also has a strong working relationship with e.g. the World Bank, Asian Development Bank, Inter-American Development Bank, African Development Bank, Nordic bilateral development organisations and other financing institutions, and projects are often identified through these partnerships. In addition, NDF aims at obtaining project information and ideas through Nordic companies, organisations and networks.

Eligible areas for NDF financing include climate change mitigation and adaptation activities. NDF financing is provided mainly for technical assistance, i.e. consulting services, and for investments, i.e. goods, works, services, and for other applicable expenses in connection with technical assistance. NDF primarily finances projects in low-income countries. As NDF is a co-financing institution, NDF financing normally constitute a part of the whole project or programme financing. The NDF-financed component of the co-financed project or programme should be in line with NDF’s mandate and eligibility criteria.

Eligible countries

Benin, Burkina Faso, Cape Verde, Ethiopia, Ghana, Kenya, Malawi, Mozambique, Rwanda, Senegal, Tanzania, Uganda, Zambia, Zimbabwe

Bangladesh, Cambodia, Kyrgyz Republic, Lao PDR, Maldives, Mongolia, Nepal, Pakistan, Sri Lanka, Vietnam

Latin America:
Bolivia, Honduras, Nicaragua

Financing decision

All financing decisions are made by NDF’s Board of Directors. The decisions are prepared by NDF’s administration.

Size of financing

The financed amounts vary depending on the scope of the project or programme. An NDF transaction usually amount to between EUR 2 million and EUR 5 million.


The implementation of NDF projects is usually undertaken by the recipient country in cooperation with the co-financing partners.

Concessional loans under old mandate

From 1989 to 2005, NDF provided concessional loans for social and economic development. In 2009, the NDF member countries decided that the Fund should provide mainly grant financing for climate change investments in low-income countries.

More information

NDF Strategy
Guidelines for Project Identification and Screening

Other financing instruments »