Finnfund targeting fiber, datacenters and telecom in LatAm

Finnish impact-focused investment group Finnfund is exploring opportunities for capital allocation in Latin America's last-mile fiber networks, datacenters and broader digital connectivity initiatives, including projects aimed at bridging the internet divide in various countries.

That is according to Niklas Simola, one of the fund's leaders for project selection in Latin America, who spoke to BNamericas at the Capacity Latam event in São Paulo.

The company provides long-term investments to private businesses in developing countries in the Global South, Simola said. Overall, Finnfund supports renewable energy, sustainable forestry, sustainable agriculture, financial institutions and digital infrastructure.

According to the executive, Finnfund's investment mandate for Latin America is relatively new. It was launched in 2024, and so far, the group has not made any major moves in the region.

"We're relatively new. We've been doing quite a lot of trips in the region to make ourselves present and get in touch with the main stakeholders," he said.

However, Finnfund recently signed its first digital infrastructure investment contract in the region with a Central American last-mile fiber optics provider.

The name of the company has not yet been disclosed, and a formal announcement is expected in the coming weeks, according to Simola.

At the Capacity Latam digital infrastructure event, Simola was a speaker on a panel discussing the regional funding landscape, alongside CEOs of datacenter companies and other industry leaders.

Datacenters are another segment Finnfund is actively exploring, particularly in markets such as Brazil, Mexico and Colombia, Simola said.

However, the focus is not on deep-pocketed hyperscale datacenter providers but rather on smaller-scale projects with limited access to private capital.

Cellular towers and telecom-energy solutions are also on Finnfund's digital infrastructure radar.

Regarding financing structures, in digital infrastructure, the group is more focused on corporate-type financing and is open to structuring deals alongside multilateral institutions such as the IDB and IFC.

Funding Finns

Although not a requirement, Finnfund tends to prioritize investments in projects that involve contracting solutions and equipment from Finnish providers.

For example, in late 2023, Finnfund invested in South African broadband provider Fibertime Group to acquire Nokia's fiber technology for use in a social digital divide program. Simola serves as a board member at Fibertime.

This month, Finnfund made a follow-on investment in Fibertime to support the company's expansion, using Nokia's fiber technology to provide internet access to underprivileged communities in the country. 

Venture capital

Finnfund also invests in startups and digital solutions, including through venture capital, according to Simola.

This funding is directed at projects that are scaling and have demonstrated market impact and availability, meaning investment rounds typically start from series B onward.

Key segments include fintech, e-logistics, e-commerce, healthtech, agtech and edtech.