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Industrial Partnerships gives loans to and invests equity in individual companies in sectors other than energy and finance in Southern and East Africa.
Industrial Partnerships invests directly where the established banking business does not dare, in new establishments and in other projects with high risk and high development effects. This is the type of investment that gives Norfund the best opportunity of choosing partners and projects, but it is equally demanding with respect to evaluation of projects and partners and to understanding of sectors and countries. Owners, management, authorities and often also customers are involved in the work of making the company viable. If they are successful, there may be substantial profitability and development effects for both the local community and the country.
Industrial Partnerships shall make investments that have especially strong development effects, engage in active ownership, and have a local network and presence. The geographical focus is on sub-Saharan Africa.
Agriculture and industry related to agriculture are most important, but Norfund also invests in other sectors, such as tourism and manufacturing. Norwegian companies can potentially contribute a great deal to growth in Africa, and Norfund is interested in more investment involving Norwegian companies. In addition to capital, Norfund assists partners in understanding countries and markets and provides locally based investment expertise through our experienced project managers, and a local business network.
Norfund can never own more than 50 per cent of the shares in a company, but in this investment area we normally seek equity positions that guarantee influence. Positions typically vary from 15 to 45 per cent. Secured loans are also a possibility in the case of Norwegian companies.
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Key figures at 31 December 2010 |
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Portfolio
Africa:
Africado
Country: Tanzania
Sector: Agriculture
Instrument: Equity capital and loan
Year of initial investment: 2010
Africado is an avocado plantation at the foot of the Kilimanjaro in Tanzania. Avocado has been introduced as a new cash crop in an area where coffee-growing dominates the local agriculture. The production will mainly be sold to the European market, and Africado will thereby generate important export revenues for Tanzania. At full capacity, Africado will employ approximately 400 persons, as well as several thousand independent farmers. Norfund’s investment involves loans and equity capital amounting to a total of NOK 22 million.
Afrinord Hotel Investments
Country: Regionally in Africa
Sector: Tourism
Instrument: Mezzanine loan
Year of initial investment: 2005
Norfund helped establish this organization in 2005, jointly with its Nordic sister organizations Swedfund, Finnfund and IFU, as well as the Rezidor Hotel Group which operates hotels all over the world under the brand name Radisson. The objective is to co finance hotel projects in several parts of Africa with the aid of subordinated loans. Norfund has agreed to invest approximately NOK 50 million in this project.
Agrica
Country: Tanzania
Sector: Agriculture
Instrument: Equity
Year of initial investment: 2010
Agrica is a 5,000 hectare rice farm in the Kilombero Valley in Tanzania, of which 3,000 hectare have already been planted and where the first sales of processed rice were made in January 2010. The investment represents for Norfund a continuous focus on the development of sustainable agribusiness in the least developed countries in Eastern Africa. Norfund’s investment will be used to continue expansion of the farm, including preparation of another 2,000 hectares of land, increase in production and storage capacity, machines and equipment and renovation of a small-scale hydropower plant that will supply the production with electricity. Tanzania does currently not have sufficient production to satisfy local demand (deficiency market), and Agrica will therefore initially produce rice for the local market. The project, that will produce approximately 30,000 tons of rice per year, represents therefore a significant increase in security of rice supply for Tanzania. Norfund has committed to invest USD 10 million in Agrica.
AMSCO
Country: Regionally in Africa
Sector: Management-for-hire
Instrument: Equity capital
Year of initial investment: 2001
AMSCO (African Management Services Company) recruits experienced advisors and consultants and hires them out as managers to small- and medium-sized enterprises. AMSCO contributes to improve the internal processes in the enterprises, and thereby to build internal management competency that will make the companies more sustainable. A total of 270 managers are currently placed in African companies through AMSCO. Norfund has invested approximately NOK two million in this project.
Basecamp Explorer Kenya
Country: Kenya
Sector: Turism
Instrument: Equity
Year of initial investment: 2010
Basecamp Explorer Kenya operates three small eco-tourism operations in Masai Mara in Kenya with a total of 46 beds. With Norfund’s investment the company will be able to expand into the Naboisho Wildlife Conservancy. The expansion represent a unique partnership between Maasai landowners, investors and conservation interest, and is an important step towards sustainable community development and wildlife tourism in Kenya. Basecamp Explorer Kenya has won numerous international awards for its pioneering work in sustainable tourism. Norfund has agreed to invest approximately 1.6 million USD in the company.
CasquipStarch
Country: Swaziland
Sector: Agriculture
Instrument: Equity capital and loan
Year of initial investment: 2008
CasquipStarch is a combined agricultural and industrial project for growing cassava and producing starch from the roots (watch a video about the project here). The processed product will primarily be exported to paper manufacturers and food producers in South Africa. Norfund gives high priority to Swaziland, and this investment will have strong development effects, including expected employment of 500 persons and a corresponding number of independent farmers over time. Norfund’s investment includes loans and equity capital amounting to a total of NOK 30 million.
European Financing Partners
Country: Regionally in Africa
Sector: Fund
Instrument: Loan
Year of initial investment: 2006
Norfund first invested in this fund in 2006 and increased its invested amount in 2009. EFP is a co financing mechanism where several of Norfund’s European sister organizations participate along with the European Investment Bank (EIB). The objective is to promote the development of the private sector in the ACP countries (African, Caribbean and Pacific Group of States), and more than 60 per cent of the investments made to date are in the LDCs. In addition to ensuring access to financing large projects in developing countries, EFP also facilitates European cooperation and transfer of competence between the European DFIs in a unique manner. Norfund has committed itself to investing a total of almost NOK 100 million in EFP.
EuroTechBridge
Country: Regionally in Africa
Sector: IT
Instrument: Loan
Year of initial investment: 2008
In 2008, Norfund provided a loan to this enterprise through the LDC credit line. Euro TechBridge has established two joint ventures with local enterprises in Kenya and Uganda, respectively. The enterprise provides technology for product traceability to companies and industrial organizations in East Africa, which will improve the efficiency of local industry and also facilitate access to Western export markets. Norfund has invested a total of NOK 2.5 million.
Green Resources
Country: Tanzania
Sector: Forestry
Instrument: Loan
Year of initial investment: 2003
Norfund invested in this company in 2003 and 2010. Green Resources was previously known as Tree Farms and is one of Africa’s leading forestry enterprises. Deforestation represents a large problem in Africa, such as in Tanzania where 420 000 hectares of forest disappear annually. Green Resources work to develop the commercial tree-planting industry and also aim to expand related local industry through the sawmill Sao Hill. Norfund has agreed to invest a total of approximately NOK 50 million.
Matanuska
Country: Mozambique
Sector: Agriculture
Instrument: Equity capital and loan
Year of initial investment: 2008
Banana plantation in northern Mozambique. Matanuska is a cooperation project with farmers established in East Africa. The plantation employs about 2,600 people and is expected to increase to 3,000 people over time. The project operates in its first phase, which consists of planting and putting 3,000 hectares into production. When the plantation operates at capacity, more than 150 containers will be exported weekly to Middle East, Asia and Europe and bring valuable export revenues to Mozambique. Norfund’s investment includes loans and equity capital in excess of NOK 55 million.
Pride Architects
Country: Uganda
Sector: Residential housing
Instrument: Loan
Year of initial investment: 2010
Norfund invested in this project in 2010 through the LDC credit line. Pride Architects acts as architect as well as project leader for a residential housing project in Uganda, with the aid of local as well as international partners. Only a minority of Uganda’s citizens have the opportunity to own their own home, because of the high costs and lack of financing. With the use of cost-efficient technologies and local partners, this project will be able to offer housing and financing solutions that are more easily available. Norfund has agreed to invest a total of NOK 2.5 million.
Scandinavian Water Technology
Country: Regionally in East Africa
Sector: Water purification systems
Instrument: Loan
Year of initial investment: 2009
Norfund invested in this project in 2009 through the LDC credit line. Scandinavian Water Technology develops and establishes community water systems that provide safe drinking water to local communities. The local communities themselves participate in operating and maintaining the systems, which ensures ownership and sustainability of the projects. Norfund has invested a total of NOK 2.5 million.
TPS (Dar es Salaam)
Country: Tanzania
Sector: Tourism
Instrument: Equity and loan
Year of initial investment: 2011
TPS (Dar es Salaam) is a tourism and hotel company which from 1 December 2011 took over ownership of the former Mövenpick Royal Palm Hotel in Dar es Salaam (232 rooms).The majority of the company is owned by the Aga Khan Fund for Economic Development (AKFED) and is managed and marketed under the Serena brand. Besides Norfund our French sister organization Proparco has invested in the company. The investment will help to ensure that tourism can grow and develop through a quality product in Tanzania and represents a springboard for increased activity in the southern part of Tanzania. Norfund has invested NOK 55 million in the project.
TPS (Rwanda)
Country: Rwanda
Sector: Turism
Instrument: Equity and loan
Year of initial investment: 2010
TPS (Rwanda) is a tourism and hotel company with presently two properties, Kigali Serena Hotel (152 rooms) and Lake Kivu Serena Hotel in Gisenyi (66 rooms), and that is building a new hotel Kinigi Lodge (24 rooms) in the Ruhengeri area in the north-eastern corner of Rwanda. The majority of the company is owned by Aga Khan Fund for Economic Development (AKFED) and is marketed and managed under the Serena brand. Kinigi Lodge will serve the mountain gorilla tourism, a very valuable source of income for Rwanda and will provide quality accommodation that could prolong and expand tourism in the area. Norfund has agreed to invest approximately 30 million NOK in the project.
Central and Latin America:
Nicafish
Country: Nicaragua
Sector: Fishery
Instrument: Loan
Year of initial investment: 2005
Norfund invested in this company in 2005. The company operates its own fishing fleet and sells fish to small-scale fishermen who process and export fresh fish and seafood to Mexico and the United States. In addition, Nicafish has developed fishery and marketing of langostino crayfish, which previously have been exploited only to a very little extent as an alternative to other kinds of seafood. Norfund has invested a total of approximately NOK 13 million.
Asia:
Kabul Serena Hotel
Country: Afghanistan
Sector: Tourism
Instrument: Equity capital
Year of initial investment: 2005
Norfund invested in this hotel project in 2005. The hotel was built following a desire from the authorities to have a hotel in Kabul that meets international standards. After the terrorist attack in January 2008 increased emphasis was put on security and protection. The main owner of the company is the Aga Khan Fund for Economic Development (AKFED), a fund which has broad experience in industrial development in this region. The hotel constitutes an important part of the local infrastructure and enables Afghanistan to offer suitable meeting and conference facilities to visitors and businesspeople. Norfund has invested a total of NOK 34 million.
Safa Marine Industries
Country: India
Sector: Manufacturing
Instrument: Loan
Year of initial investment: 2004
Norfund invested in this factory in 2004. Safa Marine Industries manufactures fishery equipment and nets for the local fishing industry. The objective was to obtain working capital in order to fulfil export orders. Norfund has invested a total of NOK 700 000.
TPS (Pakistan)
Country: Pakistan
Sector: Tourism
Instrument: Equity capital
Year of initial investment: 2007
Norfund invested in this chain of hotels in Pakistan in 2007. TPS is marketed under the brand name Serena. The main owner of the company is the Aga Khan Fund for Economic Development (AKFED), a fund which has broad experience in industrial development in this region. The company owns and runs five hotels in Islamabad, Faisalabad, Quetta, Swat and Gilgit, in addition to two lodges in Hunza and Shigar Fort. Norfund has invested a total of NOK 22 million.
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