Frontier Facility

The Frontier Facility (formerly known as Project Development and Risk Mitigation facility) is managed as a separate facility and has a specific purpose set by the Ministry of Foreign Affairs.  

The Frontier Facility is used for projects with a higher level of risk than those in Norfund’s core portfolio, and for our most demanding markets – in particular fragile states and Least Developed Countries. These projects are therefore managed as a separate facility and are not included in Norfund’s overall portfolio valuation. 

The year 2024 has been marked by an active portfolio of 10 projects, reaching a total commitment of 186 MNOK. A follow-on investment in Arnergy was committed during the year. Arnergy is a Nigerian founded provider of solar systems that builds solar home systems for the residential and commercial sectors. The follow-on investment will position Arnergy for further success. Another investment that was signed was an investment in fertilizer based on green hydrogen in Uganda, together with the partner Westgass. Strong industrial partners have set joint targets for the annual production of 200 000 tons of locally produced fertilizer, which will provide increased income and food security, without the greenhouse gas emissions usually involved in such production.  

Over 50% is invested by the Renewable Energy department, the other half of the portfolio is equally spread by Norfund’s other investment departments. Out of the total committed portfolio, 46% of the portfolio is allocated towards fragile states. Nigeria is the country with highest activity, receiving 40% of the total commitments, and is mainly due to the investments in Arnergy and Wecyclers. Chad, Burkina Faso and Mozambique are among other fragile states that are included.  

During 2024, Norfund conducted an internal review of the portfolio from 2019-2023 assessing its deliveries on the goals and priorities defined for the Frontier Facility. The findings from the report suggest that the Frontier Facility has been an important tool for Norfund in project development and risk mitigation. The facility has delivered good results, in spite of being capital constrained. In short, the report found that the facility has invested in early-phase project development within Norfund’s prioritized investment areas. One project has reached a successful financial close, and several are expected. Furthermore, the facility has reduced risk for commercial investors who invest in Norfund-funded projects. The ability that Frontier Facility provides to be able to take first-loss positions and issue currency guarantees to reduce risk has been important. All risk mitigation projects have contributed to the mobilization of commercial actors. The total volume of mobilized commercial capital is significant given the size of Frontier Facility. 

Frontier Facility portfolio