Scaling up generation of renewable energy in developing countries is crucial both for economic growth and development, as well as for mitigating climate change. Norfund’s investments in renewable energy are contributing to bypassing traditional fossil fuel-based development pathways and building more sustainable and resilient energy systems
avoided emissions in 2023 by projects financed under Norfund’s development mandate (greenfield*)
*Greenfield refers to the capacity Norfund has helped finance the construction of. Hence, it excludes the capacity already installed in the portfolio companies at the time of the investment.
Results 2023
In 2023, portfolio companies under the development mandate produced renewable energy corresponding to annually avoided emissions of 8.2 million tons of CO2e. Of this, 6.2 million tons of CO2e were avoided by greenfield projects. The latter is a significant increase from 4.5 million tons in 2022.
The main contributors to the avoided emissions in Norfund’s portfolio are large-scale producers of solar, wind and hydro power in South Africa, India, and Egypt.
Additionally, projects in Norfund’s portfolio that are financed under the climate mandate generated electricity corresponding to 2.2 million tons of CO2e emissions avoided in 2023. Thus, across both mandates, projects financed by Norfund that are still in the portfolio contributed to an estimated 8.3 million tons CO2e emissions avoided.
We also report on ex ante avoided emissions for the climate mandate.
You can read about the avoided emissions under the climate mandate here.
Avoided emissions since Norfund’s inception
All new renewable energy projects Norfund has invested in since the fund was established in 1997, avoid an estimated 13 million tons of CO2e emissions annually (greenfield). This equals approximately 26% of Norway’s annual CO2e emissions a of 2022*.
* Statistics Norway: Emissions to air – SSB
Norfund uses the harmonized IFI approach ‘Methodological Approach for the Common Default Grid Emission Factor Dataset’ (2022) to estimate avoided emissions from our renewable energy investments. The corresponding dataset provides emission factors at country-level, representing the GHG intensity of the electricity grid, thus how much CO2e emission renewable power may avoid in that country.
The estimation includes power producers where Norfund has an ownership share or has extended a loan to, and that are providing electricity to the grid or substituting power from the grid (such as “captive power” solutions that provide power directly to a consumer, for instance rooftop solar). It does not include companies providing pure off-grid solutions such as Solar Home Systems. The figures are not attributed to Norfund’s share. For exited companies, the calculation of avoided emissions is based on the company’s reported renewable energy generation the last year of reporting before the exit.
For estimating avoided emissions ex-post, we use the emission factor for the reporting year (“Operating Margin”), in line with PCAF reporting standard.