February 10, 2025
Norfund increased its investments by NOK 1.2 billion in 2024, reaching a total of NOK 7.7 billion.
“Returns from profitable businesses allow us to invest nearly three times as much as we receive from the government, but the needs are growing even faster,” says Tellef Thorleifsson, CEO of Norfund.
Global foreign direct investment in developing countries declined for the second consecutive year, falling by 2 percent in 2023 compared to the previous year, according to UNCTAD.
“The need for capital to create jobs that reduce poverty and accelerate the energy transition is immense. I am very pleased that Norfund contributes to reducing inequality through investments that consistently prove to be profitable,”
Åsmund Aukrust, Minister of International Development
Investing three times the capital received from the state
Since 2022, Norfund has annually received NOK 1.68 billion for its development mandate and NOK 1 billion for the Climate Investment Fund. Just before Christmas, Norfund also received an additional NOK 250 million for investments in Ukraine. However, returns and divestments mean that Norfund’s investments now amount to nearly three times the allocations from the state budget.
“By investing in companies, banks, and energy projects, we mobilize private capital and contribute to combating poverty and climate change in an effective and scalable way. When we exit investments after a few years, we leave behind sustainable businesses and can reinvest the same funds,” says Thorleifsson.
Norfund’s investments have seen steady growth despite challenging years marked by the pandemic, inflation, and debt crises. Investments grew by 20 percent in 2020, 10 percent in 2021, and another 20 percent in 2022. While 2023 remained at the same level as the previous year, investments rose again in 2024, with an 18 percent increase.
Through the Climate Investment Fund, which Norfund has managed since 2022 with the aim of reducing emissions in developing countries, Norfund invested NOK 1.7 billion in renewable energy last year. Additionally, NOK 1.6 billion was invested in the renewable energy sector under the development mandate, targeting job creation and poverty reduction. Under the development mandate, Norfund also invested NOK 2.6 billion in companies promoting financial inclusion, NOK 1 billion in agribusiness and industrial companies, NOK 590 million in local and regional funds that invest directly in companies, and NOK 230 million in green infrastructure.
In 2024, 45 percent of Norfund’s investments went to Africa, 39 percent to Asia, and 16 percent to Latin America.
“Our experience shows that while investing in our markets can be challenging, it is possible to make profitable investments. Private investors often overestimate the risks. By investing and mobilizing private capital, we help correct this market failure,” says Thorleifsson.