Letter from the CEO

Tellef visiting Norfund investee Hela

At the onset of 2022, none of us could have imagined the year that was to come. The war that is ravaging not only Ukraine, but the world economy, is far from over. Foreign direct investment flows are retracting from emerging markets, as the reverberations of war and the lasting impact of COVID-19 are being felt in the markets we operate in.

Despite heightened political and macro instability, Norfund is making record investments in these markets. In 2022 Norfund increased its investment in developing countries by 22.5 per cent, to another record-high 6.5 billion NOK. With this capital, we dare to invest in a resilient future.

The climate crisis is one of the most daunting challenges in all of our markets, but combating climate change also opens new investment opportunities that can build a green economy able to both reduce emissions and lift the disenfranchised out of poverty. Norfund’s Climate Investment Fund, will invest in renewable energy in developing countries with the aim of contributing to reduced greenhouse gas emissions. The new Climate Mandate became operational in 2022, and at the end of 2022 the total committed portfolio was NOK 2.14 billion. Each year, during a five-year period, one billion NOK from Norfund’s capital and one billion NOK from the state budget will go toward investments in developing markets where the climate effect will be greatest, to meet the energy demand of growing economies, sustainably.

This is not going to detract from our existing mission to create jobs and improve lives. In 2022, Norfund committed 4.5 billion NOK and made 34 new and 18 follow-on investments under what we now call our Development Mandate. Investments were broadly distributed within Norfund’s investment areas. By delivering on both our development and climate mandates, as well as understanding the interlinkages between the two, we have a strong foundation for continued growth.

We experience broad support for Norfund’s mandates and mission from not only our owners, but our partners, stakeholders, and the Norwegian public. To use the funding we are entrusted with even more effectively, we plan to recycle more capital and continue to contribute directly to the attainment of the UN Sustainable Development goals.

2022 marked the end of our strategy period, and we started 2023 with an updated strategy. The new strategy builds on our previous direction, but clearly articulates the drivers and markets where we can create significant impact. Notably, we have launched a Fragile States strategy, with a focus on the Sahel region.

 Global challenges such as climate change, ongoing wars, financial volatility, and increasing inequality, make Norfund’s mandates even more pressing. To meet increased expectations and needs, Norfund is growing in terms of resources and staff, the depth of our reach, responsibility, and relationships with stakeholders, the public and investees. Working together across cultures, borders, and time zones is challenging, but also exciting, as we endeavour to learn from each other, as well as from our own successes and failures, and continuously improve how we deliver on our mandates. 

Norfund’s ambitions are high, and our job is without a doubt complicated. We are facing daunting challenges. However, it’s a privilege to be helming a highly competent and multi-cultural Norfund team. I am confident that we are well positioned to meet our ambitions and to make an even bigger difference in the years to come.

Tellef Thorleifsson

Chief Executive Officer
March 10, 2023