In addition, SN Power – a joint venture between Statkraft and Norfund – has invested some USD 70 million in Chile and Peru.

Norfund has concentrated its activity in this continent on Central America, particularly Guatemala, Nicaragua and El Salvador.

These are developing countries where part of the population is poor and lives from hand to mouth in informal economies. The income of these people can be as low as a dollar a day.

“The development potential is large, particularly in the primary sector, but profitability depends to a great extent on exports,” observes Kjartan Stigen, Norfund’s director of communication and development policy.

“When we succeed in developing new business ¬in regions which have been reliant on a single industry, such as agriculture or mining, it has big spin-offs.

“These relate not only to employees and their families but also to sub-contractors who win work from the newly-established company.

“And we often see that, when a new business succeeds, the local owners accumulate capital which they invest in yet more new activity.

“These experiences are also very valuable for our efforts to build sustainable businesses in Africa and Asia.”

In Central America
Norfund’s investment team has organised investments totalling USD 22 million in Central America over the past three years. Another USD 10 million is due to be committed by the end of 2006.

“Helping to create profitable new businesses and jobs which lift people out of poverty is inspiring,” says Aage Hagen, Norfund’s regional director for Latin America.

He monitors investments made both directly in specific companies and with funds and financial institutions which coordinate capital spending for development investors and others.

A broad range of business sectors is covered, from production of coffee, cheese, sausages and fish to hydropower development and advertising.

Norfund representatives serve as directors for several companies and funds.

“Boardroom representation allows us and our partners in funds and financial institutions to exercise an important influence on development, financial management and reporting routines,” Mr Hagen notes. 

The value of Norfund’s investments in Latin America has increased substantially over the past three years.

“This confirms that most of our commitments yield a good return, which can be devoted in turn to further investment,” Mr Hagen notes.