Norfund – the Norwegian Investment Fund for Developing Countries –
was established by the Norwegian Parliament in 1997. The organisation is the
government’s main instrument for combatting
poverty through private sector development and
Norfund’s objective is to contribute to sustainable commercial businesses in
developing countries. Funding is provided via capital allocations from
Norfund’s development assistance budget.
Many countries support development through similar investment
funds and Norfund and its international sister organisations are known as Development Finance
Institutions (DFIs).
Norfund provides equity, other risk capital, and
loans to companies in selected countries and sectors where
businesses lack access to sufficient capital to develop and grow. The sectors
in which Norfund invests are clean energy, financial institutions and
agribusiness, in addition to small and medium sized companies through investment
funds.
Our main investment regions are Southern and Eastern Africa,
and we have offices in Nairobi, Johannesburg and Maputo. Norfund also invests
in selected countries in South-East Asia and Central
America via our regional offices in Bangkok and
San José.
Norfund always invests jointly with partners, both Norwegian and
non-Norwegian. By co-investing with others, we leverage
additional capital and can ensure the industrial and local knowledge needed for
each investment. Norfund is set up to serve as an instrument for Public Private
Partnerships.
All of Norfund’s activities are conducted in accordance with the
core principles of Norway’s development cooperation policy.
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Norfund is a state-owned company with limited liability,
established by a special Act of the Norwegian Parliament. Norfund is owned on
behalf of the Norwegian government by the Ministry of Foreign Affairs. The
Minister of Foreign Affairs has constitutional responsibility for the
organisation and Norfund’s Board of Directors is appointed by the King in
Council.
At year-end 2013, Norfund had a portfolio of about USD 1.6 billion
(NOK 9.6 billion) and 54 employees.
Investment
process
To enter into dialogue with potential
partners, Norfund normally requires a well thought-through business idea and business
plan. Norfund conducts detailed due diligences on the projects, and requires
close co-operation with all partners throughout the investment process.
When investing, Norfund spends considerable resources on understanding
the business concept involved and gaining knowledge of how the investment may
have a positive as well as a negative impact on its surroundings. Furthermore,
we also assess the quality of the partners and their ability to succeed
commercially.
Norfund does not expect ‘perfect enterprises’, but we will refrain from
financing projects that will lead to irreparable environmental degradation, and
from entering into cooperation with partners who demonstrate a lack of
willingness to ensure safe and fair labour conditions. Establishing a mutual
understanding of the standards that will serve as a basis for the operations
and embedding these in a binding agreement between the parties are key steps in
this process. Ensuring investment agreements that make room for effective
exercise of ownership as a minority shareholder is a further important
element.
To find out more about Norfund click here