Delta Capital’s Myanmar Opportunities Fund II, a Norfund investee, announced this month its new investment in a plastic bottles recycler company in Myanmar.

Myanmar, a country of 54 million people, consumes approximately 2 billion plastic bottles per year.

A survey on plastic pollution in Myanmar (Fauna and Flora International, 2019) reveals that 119 tons of plastic waste enter the Ayeyarwady River every day , making it one of the most polluted rivers on the planet.

With this investment, Commercial Plastics Company (CPC) will become the first food-grade bottle-to-bottle recycler in Myanmar with high operating standards.

Will recycle 20% of plastic bottles in Myanmar

The aim is to collect and recycle over 20% of the plastic bottles produced in Myanmar.

With this, the plastic pollution in the ocean will be reduced and over 15,000 metric tons of CO2 emission will be avoided per year.

The Myanmar company will invest in state-of-the art equipment and start producing top-quality food-grade recycled plastic, Polyethylene Terephthalate (PET), for domestic sales and exports.

Norfund and Myanmar Opportunities Fund II

Myanmar Opportunities Fund II is an investment fund targeting SMEs in Myanmar. Norfund has been invested in the Fund since 2018 with a commitment of 10 million USD.  

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Norfund mobilises more than a billion dollars for new investments in developing countries.After building SN Power into a leading hydropower company in developing countries, Norfund sells all the shares to Norwegian energy developer Scatec Solar for 1,17 billion dollars.  

“The deal opens new opportunities for us to reinvest capital in projects that are crucial to fight poverty and avoid carbon emissions,” says Tellef Thorleifsson, CEO of Norfund.

Norfund (Norway’s development finance institution) has, as owner of SN Power, been instrumental in building a leading hydropower company in developing countries. Each year, SN Power plants produce power equivalent to the electricity consumption of 7 million people and help avoid 3 million tonnes of carbon emissions. 

– The team in SN Power and Norfund has done a fantastic job. Our investment in SN Power has yielded an annual return (IRR) of 19 % in NOK (12% in USD). [1]We have thus delivered profit and enabled significant social and economic development, says Thorleifsson.

The deal

With the sale of SN Power all shares and employees in the company will be incorporated into Scatec Solar. Norfund receives USD 966 million of the settlement in cash and USD 200 million as a seller credit. Completion of the transaction is subject to approvals from relevant competition authorities, partners and lenders. SN Power’s facilities in Zambia and Panama will remain owned by Norfund. The parties will collaborate on SN Power’s projects in Africa, where Norfund retains a 49% stake. The current collaboration in solar energy will also continue.  

Hydropower and solar PV are complementary, yielding new project opportunities and further portfolio optimization. We see great opportunity in access to new growth markets as well as floating solar on reservoirs in combination with hydropower, says Raymond Carlsen, CEO of Scatec Solar. 

Large scale investments crucial to address climate crisis and COVID 

Access to renewable energy is crucial for developing countries to grow out of poverty without exacerbating the climate crisis, and the World Bank has estimated a need for $ 900 billion in renewable energy investments by 2025 to meet developing countries’ energy needs. COVID-19 has also hit developing countries hard, with a slowdown in growth and rapidly rising unemployment. 

– This deal means that we can quickly reinvest our capital. Teaming up with existing and new partners, we will capture opportunities in renewable energy that we so far have had to turn down, says Thorleifsson. 

A structured international sales process 

In 2019, Norfund initiated a structured sales process of SN Power aimed at international financial and industrial players. Norfund’s board decided on 3 July to enter exclusive negotiations with Scatec Solar, and today an agreement has been signed.  

– Our goal was to land the best deal to deliver on Norfund’s mandate. Here, Scatec Solar came with the best offer, and we are pleased to contribute to a Norwegian company becoming a leader in both hydro and solar power. This is a strong foundation for our continued collaboration, says Thorleifsson. 

For further information, please contact: 

• Norfund: Per Kristian Sbertoli, Head of public relations, per.kristian@norfund.no, tel: +47 930 89 103  
• Scatec Solar: Ingrid Aarsnes, VP Communication &IR, tel: +47 950 38 364, ingrid.aarsnes@scatecsolar.com 
• SN Power: Elsbeth Tronstad, EVP, tel: +47 905 82 383,  elsbeth.tronstad@snpower.com 

[1]Estimated, NOK/USD rate 9,35

A new analysis shows that Norfund’s investments in greenfield renewable energy plants avoid 8 million tonnes of CO₂ emissions annually. This is equal to 1/6^th of Norway’s annual emissions.

Access to reliable energy is a prerequisite for development and increasing the supply of electricity has been one of Norfund’s main impact objectives since the fund was established. However, if the energy needs are met by fossil fuels, it will be impossible to stop the climate crisis that will hurt the poorest countries the most.

At this year’s Norfund conference, focusing on climate change, a new analysis was presented that reviewed the total impacts on climate emissions supported by Norfund’s investments in Clean Energy. The results were presented by one Norwegian newspaper under the headline “Norway’s most effective climate measure is completely unknown to most people”.

Methodology used to measure the impact

The power projects Norfund has invested in have a total combined capacity of 8,700 MW and are estimated to produce 27 TWh of electricity annually. This is equivalent to the combined electricity consumption of Kenya, Tanzania, Uganda and Ethiopia. A total of 7,090 MW of the capacity financed is generated by renewable sources. Hydro projects account for the largest share of installed capacity (37%), followed by solar (23%) and wind (22%).

The analysis covers 89 power projects financed since our inception in 1997. Norfund typically participate on the equity side, but also support power projects through debt or intermediaries.

When it comes to greenhouse gas emissions, our impact is made by adding new energy from renewable sources, that replaces energy that would otherwise have be generated by fossil sources. For this analysis we thus decided to look exclusively at the greenfield investments in energy.

We have also included investments that contributed to building new renewable capacity, which we have since exited, but that are still up and running. This gives a better measurement of climate impacts, as the avoided emissions are the same, regardless of who later owns the assets, and a faster recycling of capital for new investments thus undoubtedly has a larger impact on emissions than staying on as a long-term owner of the same investments.

4,700 MW of new renewable capacity added

Norfund’s investments have since the fund was established in 1997 supported the installation of a total of 4,700 MW new renewable energy capacity. Of these, 1600 MW have been exited.

To measure the impact on emissions from these investments, we have used the methodology and default emissions factors described in GHG Accounting for Grid Connected Renewable Energy Projects, developed by the International Financial Institutions Technical Working Group on Greenhouse Gas Accounting in July 2019.

The impact analysis covers the total impacts of the power companies we have invested in. Norfund’s investment and non-financial support contribute to these results along with other inputs.

In partnership with leading investors, Norfund has made a joint commitment of US $90 million to Greenlight Planet Inc., the largest provider of solar-powered home energy products in sub-Saharan Africa and South Asia.

Greenlight Planet’s Sun King products offers clean, renewable and reliable energy to sixty million individuals across 65 countries. This new funding will enable Greenlight Planet to further expand its Pay-As-You-Go (PAYG) solar home systems business in Kenya, Tanzania, Uganda and Nigeria.

Bringing affordable, clean energy to those in need

To date, the company has delivered more than 1.3 million PAYG solar products in Kenya, Tanzania, Uganda, and Nigeria. And the demand is increasing – the deliveries have been expanding at a rate of over 65,000 new rooftop solar installations per month. 

After a decade of honing our solar technology and our solar distribution, installation, and service strategy, we are now jumping the last hurdle to solve this global challenge, that being financial inclusion, says CEO and co-founder T.Patrick Walsh.

Increased demand during Covid-19

The products – which include various essential home appliances and the solar panels and batteries to power them – are especially needed as customers spend more time at home during the COVID-19 pandemic. Sun King products have saved over US $3.4 billion on fossil-fuel-based energy costs, reducing global greenhouse gas emissions by more than 14 million metric tons.

As the company is expanding access to consumer financing, it makes basic solar power available to all people, at a cost as low as $0.15 per day. The company’s PAYG distribution network employs up to 7,000 staff across the world, 30% of whom are women employed in areas of sub-Saharan Africa, where unemployment levels are high.

The company has delivered consistent profitability over the last four years and generated its first $100 million in revenue in 2019.

Norfund’s contribution

Norfund’s $10,75 million loan will help to boost access to affordable and reliable energy to small businesses and off-grid families. This will among others contribute to increased productivity for the businesses and provide children the means to studying longer. As a result, the commitment will contribute to the United Nations’ Sustainable Development Goals Affordable and Clean Energy (SDG 7); Climate Action (13); and Decent Work and Economic Growth (SDG 8).

Norfund is invested in Greenlight Planet, alongside our British and Dutch sister organisations CDC group and FMO, in addition to impact investors ResponsAbility, SIMA Funds, Symbiotics, Global Partnerships, and private equity firm ARCH Emerging Markets Partners’ Africa Renewable Power Fund. Of the total $90 million in committed funding, $69 million has been disbursed to the company, with the balance to be drawn down as the company delivers additional solar-powered home energy systems, with end-consumer financing, to homes in Africa.

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Norfund, Finnfund and MunichRe have invested in total USD 30 millon in Softlogic Life Insurance PLC.

Press release, 2nd September 2020:

Softlogic Life Insurance PLC is pleased to announce the inking of landmark deals with Development Financial Institutions; Finnfund and Norfund who signed a USD 15Mn Tier II Subordinated Debt transaction with the company on 24^th August 2020 that will provide funding to further develop the business objectives of the company. The transactions are even more significant as they are being executed amidst the ongoing COVID-19 pandemic that has impacted the entire world.

A fast growing market

Softlogic Life is Sri Lanka’s third-largest life insurance entity. These milestone transactions amplify the excellent prospects available for the life insurance industry in Sri Lanka. The Company’s fast paced growth has brought a share of 16.2% of the market as at 31^st March 2020, doubling market share within the past five years, covering more than a million lives. The Company in 2019 grew 25% versus an industry growth of 11% issuing 247,755 policies and selling the highest number of policies accounting for 33% of the market.

“We are always keen to develop our operations by utilizing international expertise and together with Leapfrog Investments who are shareholders of the Company are continuously assessing possibilities to improve our capabilities even further. We remain fully confident of Sri Lanka’s growth prospects and see the low penetration in the life insurance industry as a great opportunity for future growth. We are proud to state that during 2019 one in every three life insurance policies sold in the market was from Softlogic Life, which is a great testament to the customer segments that we cover and the extent of our product diversification, ” said Pathirage.

Norfund’s first investment in the insurance sector

The investment marks Norfund’s first investments in Sri Lanka’s insurance industry. Softlogic Life is pioneering inclusive life and health insurance solutions in Sri Lanka and has today over half million low- and mid-income customers. By offering affordable insurance to emerging customers, the company helps to increase resilience in unexpected situations.

“Norfund invests in financial institutions to strengthen their ability to contribute to increased access to capital for companies and previous unbanked people. Softlogic Life is a great fit with our objective to create jobs and improve lives by investing in businesses that drive sustainable development.”

Fay Chetna, Regional Director Asia, Norfund.

About Softlogic Life

Softlogic Life Insurance PLC is a subsidiary of Softlogic Capital PLC and is part of the Softlogic Group, which is recognised as one of Sri Lanka’s most diversified and fastest-growing conglomerates with interests in Healthcare, Retail, ICT, Leisure, Automobiles and Financial Services. Significant stakeholders in the company include global investors Leapfrog Investments.

Softlogic Life recently made it to the Forbes Asia’s ‘Best Under A Billion 2019’ list, a business ranking which spotlights Asia’s 200 top-performing listed companies with less than US$ 1 Billion in revenue with consistent top and bottom-line growth. Softlogic Life is the only company in Sri Lanka and one of the two insurance companies in the Asian region to achieve this momentous feat.

Equity Group Chief Executive Officer James Mwangi has been awarded this year’s Oslo Business for Peace Award for his efforts in enhancing financial inclusion in the region.

Dr James Mwangi is one of Africa’s most renowned entrepreneurs.

Enabling financial access to the poorest

James Mwangi started working for Equity Bank in 1993 and has since then been known for turning around the bank from a loss making entity to making it one of today’s largest banks in East and Central Africa .

He is credited with democratising financial access by giving the unbanked population opportunities for broader economic participation.

Today, Equity has become an integrated financial services group operating in 6 African countries with over 9 million customer accounts and nearly $4 billion in assets. Norfund has been invested in Equity Bank since 2008.

A scalable, technology-driven business model

The aim of Equity Bank is to transform the lives and livelihoods of people in East Africa socially and economically by providing modern and inclusive financial services. The bank is one of the few banks globally that has succeeded in developing a scalable, technology-driven business model for efficient, high quality service delivery to the mass market in a developing country.

Norfund has been invested in Equity Bank since 2008. The investment was later transferred to Arise – Norfund’s main vehicle for investments in financial institutions in Africa, established in 2016. In 2019, Norfund committed a direct loan to Equity Bank funding further growth.

The Business for Peace award

The Business for Peace award, which has been described as Nobel Prize for Business, is conferred annually to exceptional individuals who exemplify their outstanding business worthy initiatives ethically by creating economic and societal value.

“Dr Mwangi’s ability to merge economic theory to the practical realities of village life enabled him to revolutionise the banking industry in Africa. Today, Equity is one of the most inclusive banks in the world with clients across the socio-economic spectrum including youth and women, ” states the Business for Peace press release.

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Norfund has provided a loan of USD 15 million to First National Bank Ghana, to support the operations of the bank, including providing funding for small and medium-sized enterprises.

Many developing countries are suffering from the economic consequences of the COVID-19 pandemic. As a result, small and medium-sized enterprises in particular are dependent on reliable access to credit, and financial institutions play a vital role in this respect.

The loan from Norfund is part of a USD 85 million debt package syndicated by  DEG, where Finnfund and Proparco are also participating. The loans from Norfund and our partners will support the banks’ operations going forward, including providing funding for small and medium sized enterprises in Ghana.

“The world at large is still dealing with the impact of the pandemic. We cannot downplay the importance of scaling up financial support that will help minimize the impact of the pandemic, particularly on SMEs. That is why we will capitalize on funding from institutions like DEG, Norfund, Finnfund and Proparco to engineer the expansion of real estate developments and ensure the sustainability of the private sector in Ghana”, said Dominic Adu, CEO of First National Bank Ghana.

First National Bank Ghana was founded in 2015 with a strong digital banking focus and has been developing successfully ever since. The bank offers the full spectrum of banking services to retail and commercial clients, and has recently acquired GHL Bank, which is a leading provider of real estate finance in Ghana.

The loan from Norfund will support First National Bank Ghana’s strategy to increase funding for the retail and commercial clients.

“We want to support the financial sector in Ghana, especially during these challenging times of the coronavirus pandemic. This loan provides additional capacity for First National Bank Ghana to provide funding for affordable housing and SMEs,” said Erik Sandersen, EVP Financial Institutions in Norfund.

Rome, July 8^th, 2020 – Enel Green Power, through its Indian subsidiary for renewables Enel Green Power India, and Norfund have signed a long term agreement to jointly finance, build and operate new renewable projects in India.

The agreement is a collaborative investment framework under which EGP India will be responsible for the development and construction of each project, while Norfund will have the right to invest in the projects once a specific milestone in their completion is reached, thus becoming equity partner with EGP India in the project. In addition, within the partnership, EGP India will support each project by providing technical services starting from the preliminary development activities.

This agreement gives us the opportunity to expand and strengthen our presence in India, after recently scoring our first win in a solar tender in the country.

Antonio Cammisecra, CEO of Enel Green Power.

Through the agreement, the partners, in line with their sustainability, decarbonization and renewables targets, aim at boosting the development of a clean energy footprint in India, which is rich in renewable sources and has ambitious green energy goals. India’s government is committed to achieve 100 GW of solar and 60 GW of wind power generation capacity by 2022, up from around 35 GW of solar and about 38 GW of wind as of today.

EGP India owns and operates 172 MW of wind capacity producing around 320 GWh per year in Gujarat and Maharashtra. The company was recently awarded the right to sign a 25-year energy supply contract for a 420 MW[1]solar project in Rajasthan, which will be the company’s first solar plant in the country, under the 2 GW Ninth Tranche of the national solar tender issued by the government company Solar Energy Corporation of India Limited.

By joining forces with an important partner such as Norfund, which shares our commitment towards sustainability and decarbonization, we will leverage on our technical expertise to harness the significant renewable growth potential of India, while contributing to the achievement of the country’s sustainable energy targets.

Antonio Cammisecra, CEO of Enel Green Power.

Norfund has a mandate to establish viable, profitable enterprises in developing countries, and invests in clean energy generation to enable economic growth and job creation. In 2019, Norfund financed 1,010 MW of new electricity gen­eration capacity, and Norfund’s portfolio has a total capacity of 5,866 MW. 

“For Norfund, the partnership represents an opportunity to play a role in providing much needed clean energy in an important market together with a world class industrial partner.

India has ambitious targets to increase the penetration of renewables, and there is a great need for more capital combined with technical expertise to realize them. By partnering with an experienced company like Enel Green Power, we believe we can contribute to both create jobs and promote the transition to renewables

Tellef Thorleifsson, CEO of Norfund.  

About Enel Green Power

Enel Green Power, within the Enel Group, is dedicated to the development and operation of renewables across the world, with a presence in Europe, the Americas, Asia, Africa and Oceania. Enel Green Power is a global leader in the green energy sector with a managed capacity of over 46 GW across a generation mix that includes wind, solar, geothermal and hydropower, and is at the forefront of integrating innovative technologies into renewable power plants.

The tourist and leisure sectors have been deeply impacted by the COVID-19 pandemic. Asilia Africa, a market-leading safari operator in East Africa, has seen demand vanish temporarily and needs access to funds to maintain its social and wildlife responsibilities during the crisis. IFU and Norfund have jointly provided USD nine million in debt financing.

In 2019, Africa’s tourism industry was the second fastest growing in the world and employed more than 24 million people on the continent.

For many years, Asilia’s 19 safari lodges in Kenya and Tanzania have been giving tourists a unique experience and insight into the wildlife and people of East Africa. The company offers eco-safari experiences that contribute to the conservation of the environment as well as the development of local communities.  However, overnight tourists stopped arriving because of COVID-19, with serious consequences for the company, its employees and the funding for conservation and community projects.

1 out of 3 jobs are at risk in Africa as a result of Covid-19. Sustainable African companies need emergency-funding now to overcome this crisis and to ensure that the positive economic and social development we have seen the last 20 years, among others thanks to development aid, is not lost

Tellef Thorleifsson, CEO Norfund

Minimizing negativ effects of Covid-19

To minimize the negative effects, the owners of Asilia have endeavoured to balance considerations to the future business and the current impact on local communities. Consequently, the company has managed to sustain 750 out of 900 jobs. Moreover, the company has continued funding its social and wildlife projects within the local communities.

Liquidity constraints

The combination of running expenses and no revenue puts serious constraints on the liquidity of a company like Asilia. To fund Asilia during the COVID-19 crisis and sustain the impact until the safari tourism is back to normal, IFU and Norfund have provided debt of USD nine million in total. 

Asilia is grateful for the support of Norfund and IFU as we continue to navigate the unprecedented effects COVID-19 has left on the safari and tourism industries. It is with thanks to them, our committed staff and our partners that we are ready to play our part in the recovery and development of our industry beyond the negative effects of the virus

Jeroen Harderwijk, Co-Founder and CEO of Asilia

– Asilia is a very professional and well-managed safari operator with a high degree of social responsibility and a sustainable approach to tourism, which is in line with IFU’s aim to creating high impact when investing in private businesses. Our goal is to assist Asilia in emerging even stronger after the crisis enabling them to further extend their positive impact said Emil Sierczynski, Senior Investment Manager, IFU.

Climate change is among the greatest impediments to development.
Climate impacts can push 100 million people into poverty by 2030 – unless we act right now.

View the Norfund Conference 2020 part 1 and 2 here:

At a time when the impacts of the Covid-19 dominate our thoughts it is important that we start planning for how to build back cleaner, greener and better.   

Join us on the 1st and 3rd of September in discussing what must be done to meet the urgent need for increased energy-access in developing countries – with the aim to reduce poverty – while incorporating climate action. When done correctly, climate action can unlock new economic opportunities and create much needed jobs.

Due to Covid-19, the traditional Norfund Conference is replaced with two virtual conferences.

Speakers

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