Ilmastorahasto Oy to promote low-carbon economy and digitalisation
News - Published 27.10.2020
The State Business Development Company (VAKE) will be transferred to ownership steering of the Ministry of Economic Affairs and Employment in December 2020. At the same time, its name will change to Ilmastorahasto Oy (Climate Fund). VAKE has until now been part of the ownership steering of the Prime Minister’s Office.
After the transfer of the ownership steering, the Ministry of Economic Affairs and Employment will issue operational guidelines to Ilmastorahasto Oy and appoint a new board of directors and investment council for the company. The Government’s Ministerial Committee on Economic Policy decided for the changes at its meeting on 23 October 2020. The Ministry estimates that Ilmastorahasto Oy could start its operations in December.
“Ilmastorahasto’s activities will focus on combating climate change, boosting low-carbon industry and promoting digitalisation. The aim is to reduce greenhouse gas emissions, improve the efficiency of the use of natural resources and promote biodiversity,” says Minister of Employment Tuula Haatainen, who will be responsible for issues related to the fund at the Ministry.
Transition to a carbon neutral technology requires sufficient investments in developing a circular economy, clean technology solutions and energy efficiency. The fund’s task is to reduce the carbon footprint of Finnish companies and at the same time strengthen the companies’ carbon handprint, that is, the positive environmental impacts.
The shares of Posti Group Oyj, Altia Oyj, Vapo Oy and Nordic Morning Group Oyj owned by VAKE will be transferred back to the Prime Minister’s Office under direct state ownership. The 8.3% stake in the shares of Neste Oyj owned by VAKE will remain in the ownership of Ilmastorahasto Oy but the authority over ownership steering of Neste Oyj as a whole will remain with the Prime Minister’s Office.
Ilmastorahasto has approximately EUR 70 million in disposable funds in October 2020. It will be capitalised directly from the State budget by EUR 300 million. On 23 October, the Government presented a proposal on the matter as part of its seventh supplementary budget proposal for 2020. In addition, Ilmastorahasto will receive the dividend income from the 8.3% stake in Neste’s shares in the future.
“The fund’s main investment targets are business-driven industrial scale projects, such as the demonstration phase of a new technology or the construction of a pilot plant. The investment targets can also be joint ventures by private and public actors. Ilmastorahasto can also be involved in various public platforms that improve the use of data,” Minister Haatainen says.
Ilmastorahasto Oy may grant equity and debt financing and funding may be accompanied by a subsidy element. The subsidy element of potential funding is estimated to catalyse change and enable, in particular, the promotion of innovative and early-stage climate and low-carbon solutions. A capital loan granted by Ilmastorahasto could be one natural form of financing. As a whole, the fund aims to be self-sufficient in the long term.
Ilmastorahasto will also complement the measures to promote the green transition of the EU’s major recovery instrument. In its budget session, the Government decided to reserve EUR 0.9–1.2 billion from the sustainable growth programme for the structural economic change that supports the green transition.
The Climate Fund complements the measures of the administrative branch of the Ministry of Economic Affairs and Employment to support the sustainable growth. A close dialogue between the Climate Fund, Business Finland, Finnvera, VTT and Tesi ensures that the activities of special task companies do not overlap and, on the other hand, ensures that there are no significant gaps or bottlenecks in the market.
Ville Kopra, State Secretary to the Minister of Employment, Ministry of Economic Affairs and Employment, tel. +358 40 826 1358
Petri Peltonen, Under-Secretary of State, Ministry of Economic Affairs and Employment, tel. +358 50 62 663
Press release from Finland’s Ministry of Economic Affairs and Employment 27.10.2020