My name is Åse Rage and I have been an intern in the Strategy and Communication department at Norfund. I have learned so much about the world of development finance, and I am super excited to continue in Norfund as an analyst.

The first weeks

I have a background in Political Science at the University of Oslo, and came straight from Copenhagen where I worked as an intern in the Norwegian Embassy. I have previously worked with global energy systems, sustainable development and public affairs, but the finance aspect was completely new to me. Therefore, it has been of great value to learn how investments in private capital serves as an efficient and impactful way to foster long term development in and speed up the net zero transition in developing countries.

During the Norfund Week we gained insight about Norfund’s work, values and investment dilemmas, which laid a solid foundation for the rest of our internships. We also got to know people from across the entire organization and learn about their cultures. It didn’t take long before I felt truly at home.

Strategy and communication

After receiving the necessary training in various systems and tools, I became involved in different strategic projects as well as Norfund’s daily operations. Our department leads development and implementation of different strategies, analysis of development effects, additionality, gender and climate, and external communications. I worked mostly with stakeholder relations, which included civil society, politicians, journalists, businesses and the MFA. Writing about lots of different investments was a great way to dive into interesting aspects of Norfund’s work. I also managed the intern project, where we investigated how Norfund best could benefit from implementing AI in our daily work.

The internship experience

Being an intern at Norfund for the last five months has been beyond all expectations, and I have learned so much more than anticipated. One of the best aspects of working in Norfund has been collaborating with a team of experienced, goal-oriented, and passionate colleagues. Despite the size of the organization and and the 25 different nationalities, there is a really strong sense of a common goal. This is of course due to the important mandates, but also because of the unique work culture here at Norfund.

My name is Florian, and I have been an intern in Norfund’s Strategy Department in 2023. Driven by a keen interest in developmental finance and seeking international work experience, I found Norfund to be the ideal place to work. It offered insights into sustainable investment practices and a unique work culture, providing valid reasons to move to Oslo. This text is a reflection of my experiences and learnings during my time at Norfund and hopefully sheds some light on how it is being an intern at Norfund.

The Internship Experience

I am originally from Germany and have studied international business administration at WHU-Otto Beisheim School of Management. During my gap year between Bachelor’s & Master’s degrees, my interest in impact investing, fueled by several initiatives at my university, led me to join Norfund.

Once there, I quickly became involved in various strategic projects, with a primary focus on climate. A key responsibility of mine was to ensure that Norfund’s new investments were Paris aligned. Put simply, this means ensuring the investments are consistent with the goals of the Paris Agreement, which aims to combat climate change and prevent its most severe impacts, particularly by limiting global warming to well below 2 degrees Celsius. This task required the integration of these climate criteria into the organization’s investment process. The work culture at Norfund allowed me to shape my work independently, providing a challenging and highly rewarding learning experience.

Beyond my core tasks revolving around climate, I was able to gain insights on various other subjects. One of such projects was the intern project centered around Artificial Intelligence. This project was a refreshing change from my everyday responsibilities and enabled us interns to better connect with each other.

Culture at Norfund

Speaking of connecting with other interns, the most unique aspect of Norfund is likely the organization’s culture and its positive impact it has on both personal well-being and productivity. Right at the beginning, one was immersed by the culture with a New Joiners weekend at a cabin in the mountains and the ‘Norfund Week’. This event gathered employees from around the globe, offering an unparalleled opportunity to engage with a diverse and international community. It broadened my horizons significantly, giving me contacts and perspectives from all over the world. Next to these events, one could experience the culture daily, with a general curiosity among everyone about each other’s interests, regardless of whether you are upper management or an intern.

Social Life and Integration

Living in Oslo as a foreigner, the workplace became my primary social hub, which may sound less appealing at first. However, my colleagues were incredibly welcoming, ensuring that I never felt isolated in a new city. We bonded over weekend trips, hikes, regular sauna visits, and, notably, the quintessential Oslo tradition of a Friday morning fjord swim, even in the coldest winter – a cultural experience I wholeheartedly embraced.

Extending the Journey

As my internship neared its end, I decided to extend my stay for a few more months before moving on with my gap year and studying. This period allowed me to delve deeper into my projects and solidify the relationships I’d built. The experience at Norfund was nothing short of amazing, leaving me with not just professional knowledge and experience but also a wealth of cultural insights and memories from my time in Oslo. Norfund has shown me how work can be both enjoyable, intellectually stimulating and profoundly impactful, setting a high bar for my future career pursuits.

My name is Thorvald Hillesøy and I was an intern in the Green Infrastructure (GI) department in Norfund during 2023. Norfund’s mission and its diverse investment portfolio greatly inspired me, prompting me to see the internship as an opportunity to delve deeper into the field of impact investing.

Green Infrastructure

Green Infrastructure stands as a key investment area, dedicated to fostering sustainable urban development, mitigating environmental impact, and enhancing living standards. With the global urban population projected to reach 5 billion by 2030, our focus on essential services such as water and wastewater treatment, and waste management (including waste-to-energy), is of great importance. Through investments in these critical sectors, our aim is to contribute to the creation of resilient communities and cities amidst the challenges of rapid urbanization.

During my time in the GI department I have worked on various investment deals with the team, analyzing prospective investments for Norfund. The work included everything from drafting investment papers to building financial models. Applying my academic knowledge in the dynamic environment of Norfund has been both rewarding and challenging.

The diverse range of companies and sectors I engaged with at Norfund provided a unique and enriching experience, challenging me to adapt and apply my expertise to new and unfamiliar challenges.

Trip to Tanzania and South Africa

As an intern in Norfund, I had the incredible opportunity to travel alongside the team to Tanzania and South Africa. Over the span of two weeks, our journey involved meeting companies specializing in water, wastewater, waste, and waste-to-energy sectors. The on-site experience, visiting plants and meeting these companies face-to-face, proved to be genuinely inspiring. It provided a nuanced understanding of various cases, one that is challenging to grasp solely through Excel sheets and PowerPoint decks.

Moreover, witnessing the challenges faced by these regions in person offered me a fresh perspective on the significance of Norfund’s impactful work.

The team

The team at Norfund comprises individuals with incredible experience and expertise. From day one, the culture of inclusion was evident, making me feel like a valued member of the team. The trust placed in me as an intern played a pivotal role in boosting my confidence and fostering a sense of responsibility. This atmosphere of trust not only made the learning process more enriching but also empowered me to actively contribute to the team’s projects. The friendly and collaborative dynamics within the team further exemplified Norfund’s commitment to creating a supportive work environment, where everyone’s contributions are acknowledged and appreciated.

My name is Erik and in 2023 I was an intern in the Agribusiness and Manufacturing department (Scalable Enterprises).

Before joining Norfund I took a bachelor’s degree in Business Administration and Economics from NHH Norwegian School of Economics. I was super excited by the opportunity to work on growth equity investments in emerging and frontier markets and intrigued by the dual goal of both financial returns and impact and the connection between them.

Norfund’s Scalable Enterprises department is focused on driving industrialization, economic growth, and job creation by investing in scalable enterprises in agribusiness and manufacturing. These sectors are crucial for economic growth and job creation in Africa. In agribusiness, Norfund’s investments aim to drive productivity, link smallholder farmers to markets, increase production, and create jobs. In manufacturing, Norfund recognizes the sector’s potential as a key enabler of economic growth and transformation. The focus here is on developing a strong manufacturing base in Africa, where currently a significant portion of food, beverages, and similar processed goods are imported.

During my internship, I worked on several different projects in various stages of the investment process and on both equity and debt instruments. I got to be part of the first meetings with and screening of potential targets. Working with project teams, I enjoyed discussing and evaluating the historic and projected financials, the commercial part of the company and trying to find the appropriate deal structure taking into account risk and growth prospects. I got to see how Norfund works with consultants and industry experts to add on to the knowledge of the project team in the due diligence process. I was assigned to the teams of several portfolio companies and got an insight into how Norfund is actively working with the management and board, adding value by providing guidance on environmental and social issues as well as business issues.

A highlight of my internship was my trip to Nairobi and Addis Ababa. I was welcomed, and very impressed, by the Nairobi team, I visited the sites of a potential investment and met with the due diligence providers. This gave a valuable insight into the operations of manufacturing company and the challenges and opportunities in Kenya and surrounding markets. In Addis we talked to farmers, traders and cooperatives learning about how they work while exploring how to source inputs for our backward integration expansion.

Norfund invests hRD$569 million (USD 10 million) in Banco Múltiple Ademi, aimed at benefiting its diverse client portfolio, predominantly comprised of micro, small, and medium-sized enterprises (MSMEs) in the Dominican Republic.

The strategic alliance reflects a commitment to supporting the growth and dynamism of MSMEs.

Andrés Bordas, the Executive President of Banco Ademi, emphasized the significance of the collaboration, stating, “Thanks to this agreement with Norfund, microentrepreneurs will be able to continue to grow and strengthen micro and small businesses in the Dominican Republic, which is our mission as a bank.”

The Norfund team, present at the agreement’s signing, acknowledged Banco Múltiple Ademi as a key player in providing credit and savings products to the base of the pyramid, fostering financial inclusion in the Dominican Republic.

Highlighting the importance of capital access for economic growth and job creation, Norfund emphasized the crucial role of Banco Ademi.

“In the Dominican Republic, financial inclusion is low, at 56%, and the country has a high percentage of its workforce dedicated to informal activities, according to the Global Alliance for Financial Inclusion. This makes the development role of entities like Ademi even more important, especially given the complement of financial education and customer protection principles that the Bank is committed to providing to its customer base,”

Heidi Achong

Norfund Investment Director

“In the Dominican Republic, financial inclusion is low, at 56%, and the country has a high percentage of its workforce dedicated to informal activities, according to the Global Alliance for Financial Inclusion. This makes the development role of entities like Ademi even more important, especially given the complement of financial education and customer protection principles that the Bank is committed to providing to its customer base,” says Norfund Investment Director Heidi Achong.

About Banco Múltiple Ademi

Banco Múltiple Ademi was founded in 1983 by Don Camilo LLuberes Henríquez as the Association for the Development of Microenterprises, Inc. (Ademi). It later evolved into Ademi Development Bank Ademi, S.A. in 1997, and transformed into Banco de Ahorro y Crédito Ademi in 2005. Establishing itself as the largest savings and loan bank in the country, particularly in the microbusiness segment, the entity transitioned to Banco Múltiple Ademi in 2013, becoming the sole specialized microfinance institution in the Dominican Republic.

The Climate Investment Fund and KLP are investing in the development of 144 km of high-voltage lines to connect 2.5 GW of solar and wind power in India. By replacing planned and existing coal power, it will avoid 5.2 million tons of CO2 — equivalent to 10% of Norwegian emissions. For every rupee invested by Norfund, 15 rupees are mobilized from private capital.

The agreement with the Indian developer ReNew is signed in connection with Minister of International Development Anne Beathe Tvinnereim’s visit to India. During her trip Tvinnereim also visits SAEL, a company pioneering in bioenergy development. SAEL’s innovative method utilizes straw, currently being burned in fields, for energy production. This not only reduces greenhouse gas emissions, but also mitigates local air pollution.

Solar and wind energy are geographically dispersed resources and require significant investment in power lines to transfer the power from the areas most suitable for solar and wind farms to where the power is needed and balance the grid.

In partnership with the Indian company ReNew Power, the Climate Investment Fund, managed by Norfund, and KLP, Norway’s largest pension company, are now investing up to 760 million rupees (102 million NOK) in a 49% share in a project in Gadag, Karnataka, Southern India. The project consists of the development of a new transformer station and 144 km of high-voltage lines (400 kV).

“Through the investment, we are helping to connect 2.5 GW of planned expanded solar and wind power in the south of the country to the national grid”, says Bjørnar Baugerud, head of Norfund’s Climate Investment Fund.

The connected projects will produce approximately 6,300 GWh, which results in avoided emissions of 5.2 million tons per year. This corresponds to 10.6% of Norway’s annual emissions – or emissions from 2.7 million Norwegian petrol cars.

Enormous financing needs require the mobilization of private capital

India is the world’s second largest producer of coal-fired power, and with the world’s largest growth in energy demand, the country must, according to the IEA, increase its energy production in the next 20 years by as much as the entire EU produces today. In 2022 India increased coal power generation by 12.4%, and emissions from power generation rose by almost a sixth, to 1.15 billion tons, according to a Reuters analysis.

Last Monday, the Indian energy minister announced that the country is planning for an additional 30 GW of new coal power, in addition to the 50 GW that are all on the way, to avoid power shortages. For comparison, total capacity for Norwegian hydropower is 33 GW.

If the country is to base its growth on renewable energy, a lot of capital is required: BloombergNEF has calculated that India needs $233 billion in investment just to meet the government’s wind and solar energy targets by 2030.

“The needs are enormous. And we can only meet those needs if we use public capital to mobilize private capital. We are now doing that through the Climate Investment Fund”, says Tvinnereim.

When Norfund gets KLP on the ownership side of the project together with the Indian developer ReNew, the project also gets access to loans from private banks. This means that for every rupee Norfund invests in the project, 15 rupees are mobilized in private capital.

The climate investment fund was the most important contributor to Norway reaching the government’s goal of doubling total Norwegian climate financing compared to 2020 already last year, when the fund’s investments of NOK 2.1 billion mobilized a total of NOK 5.68 billion in private climate financing.

The fund’s investments in new renewable energy in 2022 will help to avoid emissions of 6.2 million tons of CO2e per year — equivalent to 13% of Norway’s annual emissions.

“KLP is pleased to increase our climate investments in India. We expect that the project will both have a significant climate effect and provide a stable and predictable return for KLP’s owners“

Eric Nasby, investment analyst at KLP

Need 300 billion for investments in the power grid

India has previously launched plans for half of the country’s energy to be renewable by 2030. In the government’s plans to invest in upgrading the power grid, it is planned to increase the capacity for transmission between the regions from 112 GW to 150 GW by 2030, which alone will require total investments of NOK 300 billion.

In the new plan from the Indian government, part of the need to stabilize the grid is also planned to be covered by batteries, with plans for 54.5 GW of storage by 2030. However, such investments require a lot of capital.

“There are a number of larger hybrid projects that combine solar, wind and battery storage in India that need financing in India. Given the size of the fund, it is limited how much we can contribute to such projects as of today, but the needs and opportunities to put more money to work are great”, says Baugerud.

Norfund is investing USD 7.5 million in Funding Societies, Southeast Asia’s largest digital financing platform for small and medium-sized businesses. The goal is to help create new jobs in Indonesia and Vietnam.

In emerging economies, small and medium-sized enterprises (SMEs) account for 7 out of 10 jobs, according to the World Bank. However, many of them struggle to access basic financial services such as savings, insurance and loans.

Funding Societies is a fintech platform specializing in short-term financing for SMEs in Southeast Asia. The company’s ambition is to play a decisive role in bridging the gap between those who have access to finance and those who do not.

Difficult for SMEs to access capital

In developing countries, a lack of financial infrastructure constitutes a significant obstacle to social and economic development. A study carried out by Funding Societies shows that 70% of the small and medium-sized companies in their markets depended on start-up capital from their own savings and support from family and friends. Only 23% were able to obtain funding from traditional banks, and 7% used alternative funding sources.

Fintech opens up new opportunities for offering customized loan products, and the ambition is that Norfund’s investment will contribute to creating more jobs in small and medium-sized enterprises in Indonesia and Vietnam.

Fintech creates new opportunities – not least for female entrepreneurs

76% of the world’s adult population now has a bank account (World Bank). This is a significant improvement from 68% in 2017 and 51% in 2011. Nevertheless, there is a long way to go before everyone has access to basic financial services, which in turn is an important driver for people to escape poverty.

There is also a significant gender gap: in developing countries in 2021, 74% of men had a bank account, while only 68% of women had the same. A study of female small-scale entrepreneurs in Indonesia shows that limited financing from banks, due to high interest rates and complicated loan documents, is a major obstacle for female business owners.

“Norfund sees great opportunities within fintech that reduces costs and the ability to include both individuals and companies that currently lack financial services,” says Sandersen.

Norfund has previously invested in other fintech including Wave Mobile Money, operating in Senegal and the Ivory Coast; Amartha, a lending platform in Indonesia with a focus on financing rural women; and in Lula Lend, a technology-driven financial institution with a new technology for to assess the risk of loans to small and medium-sized enterprises in South Africa. Last year, Norfund also invested in the fund Integra Partners Fund II, which targets companies in Southeast Asia that focus on financial inclusion through the use of new technology.

Norfund has invested in Norrsken22, a new tech fund supporting technology growth and impact across Africa. The fund raised 205 million USD in total, surpassing its target of 200 million USD. 

Norrsken22 is focused on entrepreneurs developing fintech, edtech, medtech and market-enabling solutions that will deliver strong returns and have a positive impact. At its inception, the fund was supported by over 30 unicorn founders. 

“We are happy to contribute to the Norrsken22 Fund, a seasoned team and an already promising portfolio with more to come,” says Norfund Senior Vice President Bernt Brun.

“Through our investment we contribute to providing capital to startups on the continent, aiding the expansion of tech ecosystems in emerging markets. This facilitates innovation, drives economic growth, and paves the way for the jobs of the future. Additionally, we facilitate technological innovations that enable developing countries to ‘leapfrog’ developed markets by adopting modern business solutions.” 

Since the fund’s first close, a number of high-profile institutional investors have joined the investor base: British International Investment (BII), International Finance Corporation (IFC), US International Development Finance Corporation (DFC), Standard Bank, Norfund and Hannover Re. 

Natalie Kolbe, Managing Partner of Norrsken22, says, “The timing of the fund ideally positions Norrsken22 to support a growing African tech tailwind.  The transformative power of technology can leapfrog traditional ways of doing business, and Africa has the opportunity to lead the World with its solutions. We are excited to be partnering with so many promising startups that can have a positive impact across Africa. We are delighted to see an active and growing early-stage investor community growing across the continent, however we still see a gap at growth stage tech funding in the continent. We see a huge opportunity here and are excited to continue investing at this stage.”  
 
Norrsken22 has already made five investments.  The portfolio includes South African challenger bank Tyme Bank, African business-to-business digital commerce platform Sabi, Africa’s leading identity verification solution, Smile ID and auto financing platform Autochek. 

After the number of people without access to energy increased for the first time in several decades in 2022, the trend has turned positive again in 2023, according to figures from the IEA’s World Energy Outlook, launched 24th October. Norfund is investing in several companies that offers simple solar installations that can be payed via mobile phones.

745 million people lack access to electricity

The World Energy Outlook from the International Energy Agency (IEA) annually highlights global energy challenges ahead of the UN climate conference, COP, which this year takes place in Dubai. Last year’s report showed that the number of people without access to energy increased by around 6 million to about 760 million. However, this year’s report shows the number is expected to drop to 745 million in 2023.

80% of those lacking electricity, 600 million people, live in Sub-Saharan Africa, where simple solar installations with batteries and energy-efficient solutions are making particularly important contributions to increasing access. The IEA estimates that the number of people with access to such solutions in Sub-Saharan Africa has increased by about 25 million since 2019, surpassing 45 million in 2022. This means these systems now provide electricity to 4% of African households. So-called mini-grids provide electricity to 2% of the population in Sub-Saharan Africa, while regular grid access provides for more than 40%.

“Access to energy is a prerequisite for job creation, economic growth, and improved living standards in developing countries, and this is therefore an important focus area for us,” says Edlefsen.

1.8 million new households gained access to electricity through the companies Norfund invested in within so-called off-grid and mini-grid in 2022, shows Norfund’s annual report.

Investment in Sun King to provide further access

Norfund is now investing 20 million dollars in a securization instrument that provides working capital to Sun King Financing Limited, to increase access to energy in Kenya. The company is one of the largest providers of solar home systems and has already powered over 100 million people in Africa and Asia.

“Reduced prices on solar panels, batteries, and energy-efficient solutions, have made it possible to develop a business model for solar home systems that has now matured enough to build economies of scale, but it depends on access to affordable capital, and here we see that Norfund can make important contributions,” says Edlefsen.

Norfund has previously provided similar instruments for other companies in the solar home system space and has been a front runner in realizing these kind of securitization transactions.

Sun King customers can choose to split payments into affordable installments, which can be made via mobile or cash for as little as $0.15 per day. Their Sustainable Financing Framework shows that about half of the Kenyan customers are women, most of whom are accessing formal financing products for the first time.

Klimaendringer rammer produksjonen av populære sitrusfrukter. Gjennom en investering i et sørafrikansk selskap som blant annet leverer mandariner til Norge, vil Norfund bidra til klimatilpasning i form av nett som beskytter avlinger mot hagl, og samtidig bidra til nye jobber. 

– Verden må drastisk trappe opp finansieringen av klimatilpasning for å bevare arbeidsplasser og matproduksjon, og investeringer som denne kan gi avgjørende bidrag, sier utviklingsminister Anne Beathe Tvinnereim.  

Norfund investerer nå 10 millioner USD i The ANB Group, et sørafrikansk fruktselskap som produserer og distribuerer sitrusfrukter og tropiske frukter til markeder i Europa, Asia og Nord-Amerika. Her i Norge vil du kunne finne ANBs «Clemengold»-mandariner i butikkhyllene. 

Nett skal beskytte mot hagl  

I takt med global oppvarming tar ekstremvær stadig nye former. De siste årene har haglbyger utgjort en økende trussel mot det sørafrikanske landbruket. Høyere temperaturer kombinert med økt fuktighet i atmosfæren skaper nemlig ideelle forhold for dannelsen av store hagl, som kan forårsake skader på eiendom, biler og mennesker. I Sør-Afrika har store avlinger blitt fullstendig ødelagt av uforutsigbare haglbyger.  

ANB investerer derfor nå i netting som effektivt beskytter avlinger mot ekstremvær som hagl, varme, vind og sterkt sollys.  

– Norfunds investering skal blant annet finansiere klimatilpasning i form av netting som reduserer svinn og vannforbruk, samtidig som volum og kvalitet øker, sier Simen Berger Øby, investeringsdirektør i Norfund.  

– Denne investeringen er et eksempel på at klimatilpasning ofte handler om håndfaste løsninger som kan være ganske enkle, men som krever store investeringer. Det er avgjørende at vi bruker offentlige midler til å utløse privat kapital til slike investeringer, slik Norfund gjør, sier Tvinnereim. 

Investerer i solenergi og energieffektivisering 

Sør-Afrikas energimiks er dominert av kullkraft og har store utfordringer med strømbrudd.  

– Virksomhetene våre har allerede investert i installasjon av solcellepaneler, og vi vil fortsette å redusere karbonavtrykket vårt gjennom enda større bruk av solceller på gårdene og bygningene våre, samt energieffektivisering, sier AJ Esser, co-CEO i ANB-gruppen. 

Nye jobber i land preget av arbeidsledighet 

Omtrent halvparten av Sør-Afrikas 60 millioner innbyggere lever i fattigdom, og arbeidsledigheten har i flere år ligget mellom 25 og 30 prosent. Lav vekst kombinert med høy inflasjon bremser investeringsvilligheten og bedrifters mulighet til å ansette flere.  

Norfund formål er å skape jobber og forbedre levekår gjennom investeringer i bærekraftige virksomheter. ANB har allerede 2200 faste ansatte i fattige og rurale strøk og gir arbeid til ytterligere 4000 under innhøstning. Målet er å øke kvaliteten på disse jobbene og skape flere i årene som kommer.  

– Samarbeidet mellom Norfund og The ANB Group bidrar til å øke motstandsdyktigheten i det sørafrikanske jordbruket, og skape nye arbeidsplasser som bidrar til å bekjempe fattigdom på landsbygda i Sør-Afrika, sier Øby.