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Climate Fund starts operations

Ministry of Economic Affairs and Employment
Publication date 21.12.2020 16.03 | Published in English on 22.12.2020 at 15.33
Press release

The operations of the Climate Fund (Ilmastorahasto Oy), which invests in climate and digitalisation projects, has started. The transformation of State Business Development Company VAKE Oy into Climate Fund operating under the guidance of the Ministry of Economic Affairs and Employment has now been completed. For this purpose, on 21 December 2020, the Ministry of Economic Affairs and Employment issued policy guidelines to the Climate Fund describing its activities and objectives and appointed a board of directors and an investment board for the company.

The fund’s activities will focus on combating climate change, reducing carbon emissions in industry and promoting digitalisation. The fund’s task is to reduce the carbon footprint, strengthen the carbon handprint and promote innovative climate and digital solutions.
“I am pleased that the Climate Fund can start operating as part of the MEAE Group. The fund’s investments can support climate and digitalisation projects,” says Minister of Employment Tuula Haatainen, who will be responsible for issues related to the fund at the Ministry.

The Ministry of Economic Affairs and Employment has appointed a board for the fund, which includes Mirva Antila, Managing Director at DigiFinland; Kari Hämekoski, Senior Programme Manager at Nefco; Mammu Kaario, Board professional; Juho Korpi, Development Director at the Ministry of the Environment; Petri Peltonen, Under-Secretary of State at the Ministry of Economic Affairs and Employment; Perttu Puro, Managing Director at Tradeka, and Erja Turunen, Executive Vice President at VTT Technical Research Centre of Finland. Perttu Puro will chair the board and Petri Peltonen will act as the vice chair.

The fund’s investment board includes Permanent Secretary Juhani Damski (Ministry of the Environment), Director-General Ilona Lundström (Ministry of Economic Affairs and Employment), Senior Government Adviser Sanna Ruuskanen (Ministry of Transport and Communications), Senior Financial Adviser Maija Strandberg (Ownership Steering Department of the Prime Minister’s Office) and Senior Specialist Ilari Valjus (Ministry of Finance).

The task of the investment board is to form a view of the Government’s common strategic objectives for the operation of the Climate Fund. The investment board does not address individual investment or exit decisions. The investment board will report annually to the Ministry of Economic Affairs and Employment, which will take the board’s report into account as part of the ownership steering process.

Climate Fund to maximise performance for the good of society

The Climate Fund will fund its activities with the returns on its capital. These returns include the annual dividend income from Neste, return on other capital and, in the longer term, the proceeds from climate and digital investments. As a rule, the profits should cover the fund’s investment activities and operational costs.

The Climate Fund holds 8.3% of Neste Oyj’s shares. The other holdings in VAKE’s portfolio (Posti Oyj 49.9%, Altia Oyj 36.2%, Vapo Oy 16.7%, Nordic Morning Group Oyj 100%) have been transferred back to the State’s direct ownership and to the administration and ownership steering of the Prime Minister’s Office. Ownership steering of Neste and all the rights of Neste shareholders will also remain with the Prime Minister’s Office.

The fund will have approximately EUR 90 million in disposable funds at the start of its operations. In addition, EUR 300 million will be allocated to the fund from the State budget as per the seventh supplementary budget for 2020.

The objective of a special assignment company such as the Climate Fund is not to maximise the return on its own operations, but rather to carry out its tasks as efficiently as possible in order to maximise its performance for the good of society. In the long term, the fund’s investments and the operations of the companies and projects it funds should be self-sufficient as a whole.

Climate Fund incorporated into MEAE Group

At its climate meeting in February 2020, the Government of Prime Minister Sanna Marin announced that it would establish a climate fund on the foundation of the State Business Development Company VAKE. In connection with the budget session in September, the Government decided that VAKE would be transformed into Climate Fund (Ilmastorahasto Oy) by amending its articles of association and that the company would be transferred to the Ministry of Economic Affairs and Employment. During the autumn, policy guidelines were prepared for the company and the Ministerial Committee on Economic Policy approved them in October.

“The fund’s main investments will be industrial scale projects, such as projects related to the demonstration phase of a new climate technology or a pilot plant. The average size of these projects is EUR 10-50 million.

The investment projects can be ventures by private and public operators. The fund can also be involved in various public platforms that improve the use of data and in joint ventures by the private and public sectors. 

The fund may grant equity and debt financing as well as mezzanine financing. A capital loan is a natural form of financing in the first phase of operations. The Climate Fund may also set up a fund or be an investor in funds.

Within the MEAE Group’s innovation funding organisations, the Climate Fund will be located between Business Finland and Finnish Industry Investment Ltd (Tesi): Business Finland provides significant early-stage support to companies in research, conceptualisation, development and launching of operations, mainly through subsidies, grants and loans. Meanwhile, Tesi provides capital on market terms to companies to support their business growth at a later stage.


Ville Kopra, State Secretary to the Minister of Employment, tel. +358 40 826 1358
Oskari Räikkönen, Chief Specialist, Ministry of Economic Affairs and Employment, tel.  +358 295 047 241

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