Norfund is committed to making a difference by investing where capital is scarce and through active ownership.

The Norfund Act states that Norfund shall contribute to establishing viable, profitable undertakings that would not otherwise be initiated because of the high risk involved.

The extent to which an action contributes to an outcome that would not have happened otherwise is often referred to as ‘additionality’.

In 2020, Norfund’s defined additionality framework was revised.

What does it mean that an investment is additional?

Financially additional

According to the OECD, an investment is financially additional if it supports capital-constrained markets in which private sector partners are unable to obtain commercial financing or if it mobilises investment from the private sector that would not otherwise have invested.

Value additional

An investment is value additional if it provides non-financial value that the private sector is not offering through active ownership, promoting environmental and social standards or supporting enterprise improvement. Through our value additionality, we improve both the profitability and the development impact of the businesses in which we invest.

Ten ambitions on additionality

Norfund has a defined additionality framework that helps assess the additionality of our investments and ensure alignment with the OECD definition. This framework consists of ten additionality ambitions, see table below, reflecting both the financial and value additionality of our investments. For each ambition, we have identified relevant indicators to assess the extent to which we meet these ambitions.

The framework was revised in 2020. Changes covered both inclusion of new and refinement of existing ambitions and indicators. The revised framework is applied to assess the additionality of all new investments from March 2021.

Additionality informs our investment decisions

The framework informs our new investment decisions and the way in which we report on additionality. Each new investment is assessed against the ten ambitions, explained in the graph below, and is accompanied by a narrative description of additionality. In 2020, Norfund invested in 19 new companies and funds that were all assessed using the ten additionality ambitions.

Percentage of committed capital to new projects in 2020 meeting each additionality ambition. (Follow-on investments are not included)