Norfund ended the year with operating income of NOK 1,554 million and a positive result after tax of NOK 1,896 million. The result is significantly affected by currency effects due to a weaker Norwegian krone against our primary currency USD, but to a lesser extent than in 2022. The currency effects in the result amounted to NOK 0.4 billion compared to NOK 2.1 billion in 2022.
Excluding currency effects, the result for 2023 is NOK 1.5 billion, an increase of NOK 1.4 billion compared to 2022. This is mainly due to a significant increase in interest income from the investment portfolio and liquid assets, realized gains as well as a change in results for liquid assets placed in a bond portfolio.
The interest income from the portfolio has increased considerably to NOK 680 million as the loan portfolio has grown by 26% in NOK at the same time as floating interest has continued to increase through 2023. The accounts also show realized gains of a total of NOK 467 million and NOK 370 million in dividends.
The investment portfolio has been written down in total by NOK 460 million in 2023, of which NOK 121 million is realized loss. The ongoing conflict in Ukraine continues to weigh on the portfolio and further write-downs were necessary in the previous year. The same applies to the situation in Myanmar, where conditions continue to be demanding.
Norfund’s total balance sheet at the end of 2023 was NOK 42.0 billion. The balance increased by NOK 4.6 billion from year end 2022, of which earned profit added to equity amounted to NOK 1.9 billion and the year’s capital injection from the state budget amounted to NOK 2.7 billion. Value-adjusted equity based on estimated market values for Norfund’s portfolio was NOK 46.6 billion as of 31 December 2023. Norfund’s Climate Investment Fund accounts for 4,0 billion NOK of Norfund’s balance and 2.0 billion NOK of the capital allocation.
IRR
In 2023 Norfund had an Internal Rate of Return (IRR) for the development mandate of 1.8 %, compared to 5.1 % in 2022, calculated in investment currency. In NOK, Norfund obtained an IRR of 4.1 % during 2023 compared to 14.8 % in 2022.
As we see significant annual variations, the return on our investment is better reflected in IRR calculations since inception. As of 31 December 2023, the IRR since inception for Norfund’s development mandate, calculated in investment currency, was 4.8 %. In NOK, the IRR since inception was 7.8 %.
IRR for 2023 (investment currency)
IRR since inception (investment currency)
Investment areas
Renewable Energy portfolio
In 2023, Norfund’s Renewable Energy portfolio had an IRR in investment currency of -0.3%. The slightly negative IRR occurred mainly due to negative value adjustments after increased discount rates. Since inception, the IRR is 6.1%.
Financial Inclusion portfolio
Investments in Financial Institutions had an IRR of 6.6% in investment currency in 2023. The result is supported by higher global interest rate levels than in past years. Since inception, the IRR has been 5.5%.
Scalable Enterprises – Funds
The IRR in investment currency of our portfolio in Scalable Enterprises – Funds in 2023 in investment currency is -0.6%. Since inception the IRR is 0.3% in investment currency.
Scalable Enterprises – Agribusiness & Manufacturing
The Scalable Enterprises – Agribusiness & Manufacturing portfolio had an IRR of 3.8% in 2023. The IRR since inception is -1.1% but has improved the last years. The investments made the last five years are performing well, while some of the older investments are still challenging.
Internal Rate of Return (IRR) in investment currency
| Since inception | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Green Infrastructure | NA | -1.4 | 12.2 | 8.7 | |||||||||
| Renewable Energy | 6.1 | -3 | 11.3 | 0 | 2.8 | 7.4 | 7.1 | 19.5 | 2.6 | 2 | -9 | -4 | 12 |
| Financial Inclusion | 5.6 | 6.6 | 0.2 | 10.2 | -2.2 | 7.1 | 3.3 | 5.8 | 7.3 | 12 | 6 | 4 | 9 |
| Scalable Enterprises Direct | -1.07 | 3.8 | 6.9 | 6.5 | -9.8 | 3.3 | -5 | 4.1 | -5.2 | -4 | -10 | -4 | -10 |
| Scalable Enterprises Funds | 0.32 | -0.6 | 1.8 | 5.6 | -12.2 | -7.4 | -14.4 | -4 | -0.4 | 0 | -3 | 12 | 9 |
| Total | 4.8 | 1.8 | 5.1 | 5.2 | -0.1 | 6.3 | 4.6 | 14 | 1.6 | 3.5 | -6 | -1 | 8 |