Growing sustainable scalable enterprises drives industrialisation, economic growth and job creation.
Results in 2021
Committed through direct investments and funds
Created in direct investments and investee companies within funds portfolio
Increase in revenue (32% increase)
Jobs are vital to reducing poverty. Jobs generate income, are a basis for taxation, provide security, and can enable knowledge and skills development. In most countries, private enterprises create the vast majority of jobs. This is especially true in developing countries, where more than 90% of jobs are in the private sector.
The COVID-19 pandemic has had a serious negative impact on businesses in developing countries and on global working hours and income levels, further increasing already high unemployment rates in many of Norfund’s markets. Avoiding further job losses and creating a substantial number of new jobs in developing countries is therefore more important now than ever.
The agribusiness sector is labour intensive and employs a large portion of the Sub-Saharan African population. The sector, however, remains largely underdeveloped in terms of productivity and participation in the most value-adding activities in global value chains. Investing in businesses throughout the agribusiness value chain can thus enable more job creation, increased competitiveness, import substitution and economic growth.
Manufacturing similarly holds great potential as an enabler of economic growth and transformation in Africa. Few countries have developed their economies without developing a strong manufacturing base.
In Africa, more than 80% of the jobs are within the informal sector. This means that the workers are unregistered, have no insurance or sick leave schemes and have limited access to training. As such, it is crucial to develop formal job opportunities and ensure that these are quality jobs where workers’ rights are protected.
Norfund’s investments in scalable, sustainable businesses help to create jobs, generate government revenue and provide the goods and services that people need.
Lack of finance is a significant obstacle to business growth. The volume of foreign direct investment in developing regions is low. Additionally, the COVID-19 crisis has resulted in considerable capital outflow from emerging markets.
Growth capital, sector expertise and investors who are willing to take risks are needed to unlock the potential of scalable enterprises in developing countries.
Norfund invests in businesses both directly and through funds. Our direct investments are focused on scalable enterprises within agribusiness and manufacturing in Sub-Saharan Africa. These investments are always made in collaboration with strong industrial or financial partners.
As a direct equity investor, Norfund acts as a responsible owner. We assist developing businesses in becoming robust and sustainable while supporting their growth strategies. Norfund also provides advice to identify and mitigate environmental and social risks.
Fund investments enable us to reach a broader range of businesses and sectors together with fund managers with local knowledge and business insight than what we have capacity to do on our own. Investments are funnelled through 4 different strategic areas called (1) large-cap funds, (2) SME-funds, (3) venture funds and (4) purpose funds. The large cap funds create jobs and growth through established and well-run companies with a potential to further scale and expand its business activities. SME funds access smaller businesses that traditionally don’t have sufficient access to the capital markets. Venture funds support the establishment of new businesses, most often with a technological approach to their markets which enable them to create new and innovative business models. Lastly, purpose funds target fragile states and areas in developing countries where private capital is most scarce, and where our investments are highly additional.
Norfund’s impact objective for this business area is to foster growth in portfolio companies, both in the form of increased employment and increased revenues.
Norfund has defined the following ambitions for the strategy period 2019-2022:
- Create 50,000 jobs through direct investments and funds, whereof 3,000 jobs created in direct investments
- 2 billion NOK revenue increase in direct investments
Accumulated achievements 2019 – 2021
Investments and Results in 2021
Scalable enterprises account for 28% of Norfund portfolio. By the end of 2021, the portfolio included 28 direct investments and 62 fund investments.
Committed in 2021
Committed in total SE portfolio
6,700 jobs created
In 2021, the number of jobs in Scalable Enterprises’ direct investments increased by 2,400. When including the investee companies within our funds portfolio, the total number of new jobs created was 6700.
The total number of direct jobs in the Scalable Enterprises portfolio (incl. funds) was over 200,000.
32% revenue increase
In 2021, revenues in Scalable Enterprise’s direct investments increased by 682 million NOK (32%). This is a substantial improvement from 2020, when revenues decreased by 18%, largely due to the COVID-19 pandemic.
Investments per region
Sub-Saharan Africa is the priority region of direct investments in agribusiness and manufacturing. Norfund's staff in South Africa, Kenya and Ghana played key roles in identifying and monitoring our direct investments.
Investments in 2021
Total Scalable Enterprise portfolio
Highlights of 2021
New investee companies
New fund investments
Norfund initially invested in Marginpar in 2018. The company is a successful import agent and flower producer operating in East Africa, and Norfund invested after seeing the close alignment of our geographic and sectoral priorities with the company which covers the value chain from breeding of flowers to distribution. There were risks, but Norfund saw long-term growth opportunities and from the start was an active owner.
In 2020 though the pandemic hit, and Marginpar lost all business overnight. The Amsterdam flower market collapsed and air freight out of Africa was simultaneously affected, so flowers could neither be sold nor exported.
With 3,000 employees and no one to buy its flowers, Marginpar was in a crisis. The management of Marginpar and Norfund as investor faced an exceptionally difficult situation. Instead of implementing layoffs, all employees voluntarily took a 50% pay cut and Norfund stepped in with an emergency loan to keep people employed and the company going. Six months later, the flower demand picked up and people came back to work with 100% pay and compensation for the 50% pay reduction that they had contributed with.
Since then, Marginpar has recuperated and delivered record figures for the year ending June 2021. Stories like Agnes (see video below) illustrate the value of long-term relationships and active ownership with our investees, even during challenging events like the pandemic.
Phatisa Food Fund 2
In the beginning of 2021 Norfund, together with CDC Group (now BII), Finnfund, FinDev Canada and BIO, announced an 82 million USD joint commitment to Phatisa Food Fund 2, managed by Phatisa. PFF 2 will invest across the African food value chain, considering investments in mechanisation, inputs, poultry and meat production, food processing and manufacturing, logistics, aggregation and distribution across Sub-Saharan Africa.
Norfund committed 20 million USD to the investment that aims to strengthen and increase food supply, local production and distribution across the region.
The fund, via its investment in companies in the food value chain, targets over 90,000 small-holder farmers and micro-entrepreneurs and aims to create over 2,000 permanent jobs and sustain another 10,000 jobs. The investment follows the success of Phatisa’s African Agriculture Fund (AAF), which has created more than 1,800 jobs and benefitted 86,000 farmers operating in over 20 markets across the continent.
Building on AAF, Phatisa Food Fund 2 will enable small-holder farmers and micro-entrepreneurs to develop their skills, broadening access to markets and economic opportunities. The new fund will also address access to, and affordability of products among farmers and promote smart agricultural methods – enhancing crop resilience, reducing food loss and waste by 50% in the companies it finances, while increasing outputs, yields and incomes.
Scalable Enterprises direct investments portfolio
|Investment||Country||Investment year||Sector||Instrument||Owner share||Domicile||Committed (MNOK)|
|Phatisa Food Fund 2||Africa||2021||Agriculture forestry and fishing||Funds||0%||Mauritius||172.8|
|SPECIAL ICE COMPANY LIMITED||Ghana||2021||Manufacture of beverages||Loans||0%||Ghana||61.7|
|Seba Foods||Zambia||2021||Manufacture of beverages||Loans||0%||Zambia||44.1|
|Kagera Sugar Limited||Tanzania||2020||Crop and animal production||Loans||0%||Tanzania||132.2|
|FES||Malawi||2020||Agriculture forestry and fishing||Loans Equity||23%||Mauritius||117.4|
|Lilongwe Dairy (2001) Limited||Malawi||2020||Crop and animal production||Loans||0%||Malawi||86.4|
|Sundry Foods||Nigeria||2019||Manufacture of food products||Equity||13%||Nigeria||65.1|
|Marginpar Group||Africa||2018||Crop and animal production||Equity||18%||Mauritius||93.3|
|Neofresh||Africa||2017||Crop and animal production||Loans Equity||34%||Mauritius||78.9|
|Nyama World Malawi Ltd||Malawi||2017||Crop and animal production||Loans||0%||Malawi||29.1|
|African Century Nampula||Mozambique||2017||Real estate activities||Equity||32%||Mozambique||4.9|
|Associated Foods Zimbabwe (AFZ)||Zimbabwe||2016||Manufacture of food products||Loans||0%||Zimbabwe||17.6|
|Freight in Time||Africa||2015||Transportation and storage||Loans Equity||24%||Mauritius||70.3|
|African Century Real Estates Ltd.||Mozambique||2015||Construction of buildings||Equity||21%||Mauritius||32.9|
|African Century Infrastructure Services Ltd.||Africa||2014||Other service activities||Loans Equity||17%||Mauritius||81.6|
|Vertical Agro (Sunripe & Serengeti Fresh)||Africa||2014||Crop and animal production||Loans||0%||Mauritius||53.6|
|Lake Harvest Group||Africa||2013||Fishing and aquaculture||Loans Equity||33%||Mauritius||140.2|
|ASILIA (African Spirit Group Limited)||Africa||2013||Tourism||Loans Equity||32%||Mauritius||132.8|
|UAP Properties Limited||South Sudan||2013||Real estate activities||Loans||0%||South Sudan||8.8|
|Agrivision||Zambia||2012||Agriculture forestry and fishing||Equity||24%||Mauritius||161.6|
|Across Forest AS||Nicaragua||2012||Forestry and logging||Loans||0%||Norway||1.3|
|TPS Dar es Salaam||Tanzania||2011||Tourism||Loans||29%||Kenya||5.3|
|Green Resources USD||Africa||2009||Forestry and logging||Equity||51%||Norway||560.8|
|Africado Ltd.||Tanzania||2009||Agriculture forestry and fishing||Equity||33%||Mauritius||7.1|
|European Financing Partners SA||Global||2006||Investment funds||Loans Equity||6%||None||525.9|
|Afrinord Hotel Investments||Africa||2005||Tourism||Loans Equity||20%||Denmark||25.4|
Scalable Enterprises funds portfolio
|Investment||Country||Investment year||Sector||Instrument||Owner share||Domicile||Committed (MNOK)|
|Helios IV||Africa||2021||Investment funds||Funds||0%||Guernsey||220.5|
|Vantage Mezzanine Fund IV - USD||Africa||2021||Investment funds||Funds||0%||South Africa||211.7|
|Meridiam Africa Fund II||Africa||2021||Investment funds||Funds||0%||France||199.8|
|Vietnam Investments Fund IV||Vietnam||2021||Investment funds||Funds||0%||Cayman Islands||132.3|
|African Rivers Fund III||Africa||2021||Investment funds||Funds||0%||Mauritius||132.2|
|AFMF: ASEAN Frontier Markets Fund||Asia & Pacific||2021||Investment funds||Funds||0%||88.2|
|Vantage Mezzanine Fund IV - ZAR||Africa||2021||Investment funds||Funds||0%||South Africa||49.8|
|ACI Motors Ltd||Bangladesh||2021||Manufacture of motor vehicles trailers and semi-trailers||Equity||5%||Netherlands||41.0|
|AfricInvest Fund IV||Africa||2020||Investment funds||Funds||10%||Mauritius||262.6|
|Navis CLMV||Asia & Pacific||2020||Investment funds||Funds||17%||Cayman Islands||216.8|
|CASEIF IV||America||2020||Investment funds||Funds||26%||Canada||176.3|
|Excelsior Vietnam||Vietnam||2020||Investment funds||Funds||19%||Singapore||131.7|
|Openspace Ventures III||Asia & Pacific||2020||Investment funds||Funds||8%||Cayman Islands||131.6|
|Ascent Rift Valley Fund II||Africa||2020||Investment funds||Funds||12%||Mauritius||87.9|
|Novastar Ventures Africa Fund II||Africa||2020||Investment funds||Funds||7%||Mauritius||71.1|
|Solon Capital Holdings||Africa||2020||Investment funds||Funds||30%||Mauritius||35.0|
|Antler East Africa Fund I||Africa||2020||Investment funds||Funds||20%||Cayman Islands||13.2|
|Development Partners International III||Africa||2019||Investment funds||Funds||4%||Guernsey||355.4|
|Verod Capital Growth Fund III||Africa||2019||Investment funds||Funds||10%||Mauritius||178.0|
|Frontiir Co. Ltd.||Myanmar||2019||Information service activities||Equity||2%||British Virgin Islands||26.9|
|ECP Africa Fund IV||Africa||2018||Investment funds||Funds||8%||Mauritius||242.3|
|Cepheus Growth Capital Fund||Ethiopia||2018||Investment funds||Funds||18%||Mauritius||135.3|
|Myanmar Opportunities Fund II||Myanmar||2018||Investment funds||Funds||14%||Cayman Islands||72.8|
|EcoEnterprises Partners III LP||America||2018||Investment funds||Funds||5%||Ireland||54.5|
|Nordic Horn of Africa Opportunities Fund||Somalia||2018||Investment funds||Funds||11%||Canada||34.3|
|Agri-Vie II||Africa||2017||Investment funds||Funds||11%||Mauritius||130.4|
|Fanisi Capital Fund II||Africa||2017||Investment funds||Funds||35%||Mauritius||109.0|
|Spear Africa Holding II||Africa||2017||Manufacturing||Funds||21%||Mauritius||66.7|
|Oasis Africa Fund||Africa||2017||Investment funds||Funds||10%||Ghana||42.7|
|Fanisi Management II||Africa||2017||Investment funds||Loans Equity||25%||Mauritius||22.1|
|FIPA II||Africa||2016||Investment funds||Funds||38%||Luxembourg||156.7|
|Frontier Fund II||Bangladesh||2016||Investment funds||Funds||10%||Cayman Islands||29.4|
|GroFin SGB Fund Limited Partnership||Africa||2015||Investment funds||Funds||19%||Mauritius||125.6|
|Cambodia Laos Myanmar Development Fund II||Asia & Pacific||2015||Investment funds||Funds||16%||Singapore||93.3|
|BPI East Africa LLC||Africa||2015||Investment funds||Funds||17%||Mauritius||51.1|
|CASEIF III||America||2014||Investment funds||Funds||24%||Canada||80.9|
|Ascent Rift Valley Fund Ltd||Africa||2013||Investment funds||Funds||13%||Mauritius||84.4|
|Novastar Ventures East Africa Fund||Africa||2013||Investment funds||Funds||13%||Mauritius||83.1|
|CORECO||America||2012||Other financial services||Funds||22%||Delaware||75.0|
|Kinyeti Capital Ltd||South Sudan||2012||Other financial services||Loans Equity||50%||South Sudan||35.4|
|Africa Health Fund (Aureos)||Africa||2011||Investment funds||Funds||9%||South Africa||44.5|
|Voxtra East Africa Agribusiness Ini||Africa||2011||Agriculture forestry and fishing||Funds||30%||Norway||31.7|
|Vantage Mezzanine Fund II||Africa||2011||Investment funds||Funds||5%||South Africa||23.1|
|Frontier Fund||Bangladesh||2010||Investment funds||Funds||11%||Cayman Islands||49.5|
|Neoma South-East Asia Fund II||Regional||2010||Investment funds||Funds||2%||Canada||27.2|
|Agri-Vie||Africa||2010||Agriculture forestry and fishing||Funds||9%||South Africa||22.7|