The government of Zambia has identified agriculture as a priority sector for achieving economic development and reducing poverty. Agrivision is a vertically integrated agribusiness company operating in Zambia. Norfund’s investment has supported the company’s expansion, thereby contributing to increased food production, job creation and increased market access for smallholders.
Agrivision – A staple food producer in Zambia
Haltons Pharmacy
Funding accessible pharmacy care
The Fanisi Venture Capital Fund invests private equity and venture capital in businesses that have substantial growth potential. Norfund was instrumental in establishing Fanisi, investing both in the management company and the fund. Haltons Pharmacy is a Fanisi investee company and provides quality medicines and medical advice in Kenya through a national network of outlets.
Increasing access to capital for MSMes in Cambodia
Limited access to capital is one of the key obstacles to growth in Cambodia. Norfund has supported the expansion of the microfinance institution Hattha Kaksekar Limited, thereby contributing to increased access to finance, financial literacy and job creation. In 2016 the institution was ready for investment from an experienced shareholder in the banking sector, and Norfund sold our shares.
Bio2watt – Electricity from organic waste
Energy constraints are impeding South Africa’s economic growth. The new Bio2Watt biogas plant produces electricity from organic waste, and is helping to reduce both the nations electricity deficit and the amount of landfill waste. Norfund provided project development financing, a third of the equity capital required and played an instrumental role in structuring the deal.
Marginpar
The climate in East Africa is well-suited to flower production, and the potential for growth in the sector is high. Norfund’s investment in Marginpar enabled the acquisition and development of several underperforming farms in Kenya and Ethiopia which have secured decent jobs.
Video about Marginpar:
Supporting Financial Institutions in Myanmar
Lack of access to capital is a major barrier for micro and small entrepreneurs in Myanmar to develop their businesses. Although the demand for capital is high, the microfinance industry is underdeveloped.
Informal Lenders
In Myanmar, only 26 percent of adults have an account at a formal financial institution. Banks seldom lend to micro and small companies (MSMEs), and although microfinance companies were legalised in 2011, the number of microfinance institutions is low. Informal lenders are thereby still the main source of financing for most entrepreneurs.
26%
of the adult population in Myanmar have a bank account at a formal institution
Lacking Formal Institutions
Lack of access to capital is also a main reason why microfinance
institutions have limited ability to give loans and expand in Myanmar. In 2013, Norfund was the first international lender to a Myanmar-based microfinance operator. The loan was invested in Proximity Design, a social enterprise that had supported rural farmers and families in Myanmar since 2004.
New Commitments
In 2018, Norfund made several new commitments in Myanmar’s microfinance sector.
Norfund and two international partners, succeeded in creating a new, innovative funding agreement for a microfinance institution named Myanmar Finance International Limited (MFIL).
What is unique with this agreement is that it opens up for one of Myanmar’s largest banks, Yoma Bank, to give loans to MFIL due to that Norfund and partners are providing the security the bank requires. With this agreement, MFIL will be able to double its loans portfolio and reach more than 100,000 micro entrepreneurs in Myanmar.
“We are excited by the opportunity to work with Yoma
Bank to further increase our outreach to continue to grow
our business”
Mr. Po Yort, Managing Director of MFIL
Rural Financing
A follow-on equity investment to another microfinance institution, Advans MFI Myanmar, was closed in 2018. Advans MFI Myanmar is an experienced actor with focus on rural financing. Norfund’s equity investment will enable the company to attract additional funding to grow its loan book.
66%
live in rural areas in Myanmar
Our goal is to serve clients who have insufficient
access to formal banking services, with the ultimate
aim of contributing to private-sector led economic
and social progress in Myanmar.”
Jana Kadian, CEO of Advans Myanmar
Norfund made an investment in 2018 in the Myanmar Opportunities Fund II, an investment fund targeting SMEs in Myanmar.
Relevant articles:
How it is to be a new employee at Norfund
This year Norfund introduced an internship program. Four enthusiastic graduates get to experience how it is to work in a development finance institution. In the following weeks the interns will give a quick look into how life is in Norfund. Following is their first letter.
Sore legs and eager minds!
We are now eight weeks into our internship at Norfund and what a journey it’s been so far! From attending exciting conferences to travelling to Kenya and Nigeria this internship has showed us what Norfund is all about.
Intense first weeks
During our first week we were warmly greeted by the Norfund team, and it didn’t take long until we understood what a great place Norfund is. We got right down to business with a great introduction to how Norfund operates and what a Development Finance Institution does. We quickly recognized the passion for development in Norfund.
Filled up with new knowledge, we set off for Beitostølen for some team building after work on Friday. It was a great way to get to know our colleagues better and we quickly understood that Norfund does not joke around when it comes to hiking.
The Norfund Week
With sore legs from our hike we jumped right into Norfund week the following Monday. This was an amazing week, full of activities and interesting sessions. We got to meet all our colleagues from the regional offices in Africa, Central America and Asia and learn from their valuable experience.
With Norfund’s new strategy there was a lot of useful discussions on how to collaborate to achieve our goals and it was valuable to understand how difficult it is to invest in some of Norfund’s regions. It is safe to say that we were blown away by the competency in the organization.
In addition to this, the Norfund Conference was a highlight of the week providing a great introduction to the valuable work Norfund does. Lectures from some of our portfolio companies, together with the Minister for development demonstrated the imperative importance of Norfund’s investments with regards to job creation. The theme of this year’s conference was Moving Money – Improving lives, which we found very fitting to Norfund’s role.
It’s safe to say that we were proud to have an employer with 304,000 jobs in its portfolio.
Back to reality
After a hectic start we started diving into the different projects we had been assigned. We all work on different projects, but work together on a country analysis of Senegal, which is one of Norfund’s new core countries. Did you know that 60% of the population in Senegal is under 24 years old? Or that Switzerland is Senegal’s second largest export destination?
Going forward we will be busy working with our respective projects but will provide updates from some exciting projects.
Case Study Trip to Kenya
My name is Eline. I started my internship in the Scalable Enterprises investment department in Norfund in August. Our focus is on investments in agribusiness and manufacturing companies that have potential for growth and job creation. Now I will present one of the projects I have been working on.
I am writing a case study about Marginpar, a summer flower producer with farms in Kenya and Ethiopia. In 2018, Norfund invested USD 8.5m as equity to finance the acquisition of several distressed farms. In addition to providing capital, Norfund has assisted in strengthening corporate governance and enhancing environmental and social performance in Marginpar. To get information for this case study, I got the opportunity to travel to Kenya to visit two of the farms.
Norfund has a regional office in Nairobi, which I got to visit during this trip. We work closely with the regional offices, so it was very nice to spend some time together outside of Skype and mail.
The farms I visited are located in Nanyuki and Rongai in Kenya. It was very inspiring to see the farms’ operations, and how the employees at all levels are involved in continuously improving the way they work.
On my way back home, I spent a day in Amsterdam where I got to meet the marketing and distribution part of the company. I also visited the flower auction in Aalsmeer, which is the world’s largest, where part of the flowers from Kenya are distributed. This is kind of cool if you are into logistics ?
After the week of getting to know the company, I returned to the Oslo office. I will use the information I got about Marginpar to write a case study that presents Norfund’s role in the company and the development effects of the investment. It was very interesting to visit one of Norfund’s investments, and it was motivating to see in practice how Norfund contributes to development.
It is safe to say that the past few months of working in Norfund have been very educational and fun. It has been very valuable to learn about the challenges and risks of investing in Norfund’s geographies and sectors. The experience and competencies of the people working here are truly impressive.
Increasing Local Produce and Exports in Zimbabwe
Associated Foods Zimbabwe Ltd (AFZ) is Zimbabwe’s leading producer of peanut butter, jams, nut spreads, and canned tomatoes and fruit. After successfully installing a new state-of-the-art production line, the company is now eyeing the export market in addition to serving the domestic market.
Background
AFZ was established on 1 January 2016, as a result of a merger between Zimbabwe’s leading producers of jams and peanut butter – Honeywood Enterprises Ltd and Spread Valley Ltd. Norfund’s 17 million NOK investment contributed to partly-finance the merger and provided capital expenditure to facilitate improvements, such as the installation of a new peanut butter production line. In addition, Norfund’s investment also provided working capital.
”The new state-of-the-art production line is
all computerised, with human hands only at the
packing stage. More importantly, the quality of our
products has vastly improved. It is now world class,”
Simba Nyabadza, Director and majority shareholder at AFZ
Collaboration
By combining the manufacturing strengths of Honeywood Enterprises, and the sales, marketing and distribution skills of Spread Valley, the new company is now benefiting from economies of scale and is adding value for stakeholders, including its customers. The company is now also able to developing products for export.
Increased Employment
AFZ plans to expand its local raw material sourcing via outgrower schemes. This will result in increased employment throughout the agribusiness value chain in Zimbabwe.
Improved productivity and product quality will increase the consumption of local produce and thereby reduce dependence on imported goods. This is especially important as most African countries struggle to build their foreign currency reserves, and must therefore promote processing and consumption of quality local goods, while limiting imported goods.
Responsible banking
The Banco Promerica Group, a Norfund investee with banks in Nicaragua, Costa Rica and Ecuador, is among the first signatories of The Principles for Responsible Banking.
Banks can be agents of change and support the UN Sustainable Development Goals (SDGs) through their daily banking activities. To do so, the banks must be clear about how their products and services create value for their customers, clients, investors, as well as society.
Banks shall have a positive influence in the communities we serve. This is one of the key components in Grupo Promerica’s strategy.
Ramiro Ortiz, Chairman of Banco Promerica Group
The Principles for Responsible Banking provides a framework for sustainable banking, and helps banks to align its business strategy with SDGs.
The world is at a crossroads and each of us needs to play an active role in shaping the future. At Banco Promerica Costa Rica, we understand our responsibility to all our stakeholders and to the world. We are proud to endorse the Principles for Responsible Banking.
John Keith, CEO, Banco Promerica Costa Rica
As part of Banco Promerica Costa Rica’s eagerness to contribute to the SDGs, Norfund will, through a 15MUSD sub-debt instrument, support their green lines initiative. The term is 10 years.
This is the first time in Central America that sub debt is provided to support green lines of which a majority is in clean energy. Focus is on providing funding for smaller PV clean energy projects in Costa Rica. In addition, the quasi-equity instrument will provide a strong value add as it unlocks additional funding.
We would like to thank Norfund sincerely for showing us the way and supporting us with financial resources, technical assistance, motivation and advice. Without this it would not have been possible to be the first Costa Rican bank signatory of “The Principles of Responsible Banking” at the United Nations.
John Keith, CEO, Banco Promerica Costa Rica