Norfund has been given a development-policy mandate by the Storting and the Government, and is to form an integral part of Norwegian development assistance. The Norfund Act of 1997 states that Norfund shall “... establish viable, profitable enterprises that would not otherwise have been established because of high risk”.
Poor countries need investment in profitable enterprises that can create employment opportunities, generate tax revenues and bring in skills and technologies, and thereby contribute to economic and social development. High risk and limited knowledge make many private investors hesitant to invest in the poorest countries. For this reason, a skilled and business-oriented intermediary providing independent expertise and venture capital is required to dismantle the barriers to private investment in a profitable business sector in these countries.
For Norfund, this implies that we undertake investments that are additional to what would otherwise have happened in the market. In other words, we invest in places where there is a lack of capital and skills. In addition to making our own investments we are catalytic by mobilizing private capital and expertise that would not otherwise have been available in poor countries.