Norfund continues its investment in Kinyeti Venture Capital (Kinyeti), alongside the Swedish development finance institution Swedfund, with a follow-on loan of up to 4 million USD.

Kinyeti is an investment company established in 2012 as a joint venture between Norfund and Swedfund, providing much-needed risk capital to local small and medium enterprises (SMEs) in the form of loans and is the only provider of USD-denominated risk capital in South Sudan. The company helps build the country’s private sector by offering capital to entrepreneurs and growing businesses which support job creation.

South Sudan is a country that has struggled to form a viable governing system and has been plagued by widespread corruption, political conflict, and civil war. More than eighty percent of the population lives below the poverty line and the economy has been negatively affected by climate change, violence and multiple global crises. The SME sector is still young and emerging from the effects of many years of civil war.  

In light of the difficult situation in South Sudan, Kinyeti is a strong and resilient partner for investing in a fragile state. Since being set up in 2012, the company has supported SMEs with financing and created jobs in South Sudan amidst the political and economic instability. 

“As a profitable investment company in South Sudan, Kinyeti is well-rooted in our strategy for fragile states. Our follow-on investment builds on a decade of experience and achievements since Kinyeti’s establishment and will put the company on a properly funded growth path,” says Vegard Halvorsen, Investment Director in Norfund. 

Kinyeti has invested almost 11 million USD in 21 companies to date, with plans to invest another 10 million USD over the next four years. Relevant sectors include food & agribusiness, services such as hospitality, infrastructure support to contractors through purchase of machinery, health through purchase of medical equipment, transport & logistics through warehouse construction, and renewable energy through replacement generators with solar power. 

“Kinyeti contributes to private sector development in a particularly vulnerable economy, thereby creating jobs and improving local livelihoods. Our hope is that its performance will attract more risk capital to South Sudan with time,” Halvorsen says. 

The new Climate Investment Fund, managed by Norfund, will make its first transmission investment in an Indian project being developed by ReNew Power, together with KLP, Norway’s largest pension company.

In partnership with the ReNew Power, one of the largest renewable energy independent power producers (IPPs) in India and globally (NASDAQ: RNW) (Nasdaq: RNWWW), Norfund and KLP will invest around 900 million INR (109 million NOK) for 49% ownership stake in ReNew’s transmission project in the Koppal district of southern India, with ambitions for further joint investments. 

To meet growth in electricity demand over the next twenty years, according to the IEA, India will need to add a power system the size of the EU. Scaling up solar and wind energy requires significant investments in transmission lines to stabilize the grid and transport energy from the areas most suitable for solar and wind parks. 

Connecting 2.5 GW renewable capacity 

“Through this investment we are contributing to the connection of 2.5 GW of planned renewable power in the south being connected to the national grid. We are pleased to make Norfund’s and the Climate Investment Fund’s first investment in the sector, and we look forward to strengthening our partnership with Renew,” says Bjørnar Baugerud, Vice President, Clean Energy in Norfund. 

The project will consist of a 5 x 500 MVA 400/220 kV sub-station at Koppal with 400 kV D/C quad moose transmission line from Koppal substation to Narendra New substation and 400 kV GIS Extn at Narendra New in Karnataka (Koppal Project). Its commercial operations are expected to start in the first quarter of FY24. 

“This investment will reduce bottlenecks in the Indian transmission system and open the way for new renewable power generation to produce electricity to meet rising Indian demand. We expect the project to both generate attractive returns and have a strong climate impact,” says Aage Schaanning, Chief Financial Officer at KLP. 

“Investment in the transmission sector provides synergies with our core RE portfolio and demonstrates our success in capital recycling. As a leader in India’s energy transition, we are excited to partner with Norfund and KLP to support India’s green energy transition and look forward to strengthening this partnership in the future”, says Sumant Sinha, Chairman, and CEO of ReNew Power. 

Third investment of the Climate Investment Fund in India 

Operational since May, Norway’s new Climate Investment Fund, managed by Norfund, will reduce and avoid emissions by investing in renewable energy in developing countries with significant emissions from coal power and other fossil fuels. The fund has already made two previous investments in India – in a large-scale solar park with Enel and in Fourth Partner Energy, India’s leading developer of distributed solar energy solutions. 

The new Norwegian Climate Investment Fund received 1 billion NOK in the state budget for 2022, matched by an equal sum from Norfund’s capital, and the Parliament has now approved another 1 billion for 2023. The plan is for the fund to reach 10 billion NOK within five years. 

ReNew is one of the largest renewable energy IPPs in India. ReNew develops, builds, owns, and operates utility-scale wind energy, solar energy, and hydro projects. As of Nov 01, 2022, ReNew has a gross total portfolio of ~13.4 GW of renewable energy projects across India, including commissioned and committed projects. 

According to IEA, yearly investments in renewable energy in developing countries needs to increase sevenfold from today’s 150 billion USD to over 1 trillion from 2026 to 2030, if we are to reach the 1.5-degree limit. At the same time a new report from Bloomberg NEF shows investments in renewable energy in these markets have fallen to the lowest level since 2016. India is the world’s second largest consumer of coal power.

Norfund investee Africado has been awarded the Tanzania Revenue Authority’s Certificate of Merit “in recognition of the company’s outstanding tax compliance in 2021/22 during the Taxpayers Appreciation Day 2022.”

The company has also received the Rainforest Alliance endorsement certificate in recognition of their conformance with the Rainforest Alliance Sustainable Agriculture Standard.

Africado was established in 2007 around the Kilimanjaro area in Tanzania, and has developed and grown as a business, producing and exporting Hass avocados.

Norfund congratulates Africado with these awards and recognition!

Baoma 1, Sierra Leone’s first Independent Power Project (IPP), has achieved commercialization. The 5MW solar power project is owned by Serengeti Energy Limited, a private company that is backed by shareholders KfW, Norfund, NDF, Proparco, Stoa and Swedfund.

The 5MW solar power plant is the first phase of a 25MW solar PV power project in Yamandu, near Bo town in Sierra Leone. The project will add approximately 15% to Sierra Leone’s total electricity generation capacity, providing a significant contribution to the need for more electricity in the country. The company expects to commence building the second phase of the project in 2023. This will complete a total investment of 35 million USD in the Sierra Leone power system.

Serengeti Energy owns and operates renewable power plants in the Republic of South Africa, Rwanda, Uganda, Malawi and Sierra Leone and is focused on building its business by delivering new supplies of clean, affordable energy.

Banco Múltiple BDI, S.A. was selected by Norfund as the recipient of its first direct capital investment in the Dominican Republic. 

With this investment, Norfund has subscribed and paid for new shares of Banco BDI, equivalent to 20% of the subscribed capital stock and paid-in capital of the Entity. With this, Banco BDI continues to expand and strengthen its capital base.

Banco BDI is a financial entity founded in 1974 under the name “Banco de Desarrollo Industrial, S.A.” In 2001, the Monetary Board approved the change of franchise to a commercial bank, authorized to provide multiple banking services, which was ratified by the Superintendency of Banks in 2002. 

In recent years, Banco BDI has focused its strategy on the innovation and digitization of products and services, on the constant improvement of service and customer relations, and on the sustainable growth of products and services to the public. 

The Superintendency of Banks of the Dominican Republic, through a Circular dated October 11, 2022, granted the corresponding no objection to the capital investment made by Norfund, thus complying with current regulations. 

The president of Banco BDI, Mr. Juan Carlos Rodríguez Copello, expressed pride and satisfaction that Banco BDI had been chosen by a sovereign fund with the prestige and track record of Norfund to be its partner in the Dominican Republic, while indicating that this investment constitutes an important recognition of the stability and soundness of the national financial system, as a result of the policies and measures of the Central Government and the monetary and financial authorities (Central Bank of the Dominican Republic and Superintendence of Banks) that encourage, promote and foster the domestic and foreign investment in the country. 

Norfund’s regional director for Latin America, Federico Fernández, said Norfund’s investment will support Banco BDI’s capital adequacy and prepare the bank for future growth opportunities.

“We look forward to partnering with Banco BDI to support economic growth and job creation in the Dominican Republic”

Federico Fernández, Regional Director for Latin America

With the investment made, Norfund will occupy a position on the Board of Directors of Banco BDI, thus becoming the first development financial institution, shareholder of the bank, with active participation in its Board, where it will contribute to the implementation of high international standards in environmental, social and corporate governance practices. 

With this strategic alliance between Banco BDI and Norfund, Banco BDI continues to consolidate its capital base, improve its market position, reduce funding costs, strengthen its risk profile and promote its digitalization and sustainability processes.  

State Secretary for International Development, Bjørg Sandkjær, visited Senegal on the occasion of the Global Nansen Forum late October. The Norwegian Embassy in Ghana, which also covers Senegal, planned a bilateral program for the state secretary in order for her to see successful initiatives and projects in the country. On the program was Baobab Plus, a Norfund investment that offers solar energy-based solutions for households that are not connected to the grid, so-called “off-grid” solar energy for households.

The team from Norway met with Baobab Plus’ management in Senegal, Magloire Ahouanmenou, Chief Commercial Officer and Saër Dial, Chief Customer Officer. After a comprehensive presentation about the developments for the company the past year, their SHSs as well as their innovative business model, the visitors spoke about the impact of the SHS with a Baobab Plus client.

Pastor Francois, who lived in the region Fatick in Senegal, showed his solar energy system that enabled him to have lighting in his house. The pastor spoke proudly of a strengthened marriage after he and his wife gained access to energy and lighting. The system has also made it possible for the couple to install a TV, which several people in the village are very happy with, as people come to watch football at the pastor’s house.

Together with Rwandan pension fund RSSB, Norfund and SOS Children’s Villages are investing in the Katapult Africa Accelerator Program. Nine agriculture and technology startups will receive funding to scale up new solutions that will both create jobs and increase food security.

After evaluating over 600 African startups, Katapult has chosen nine companies from five countries featuring some of the most talented entrepreneurs in technologies related to food, agriculture, and climate.

Over a three-month period, the startups will go through Katapult’s world-class impact accelerator program, with a track record of producing ‘impact unicorns’. Described as the “most intense and fulfilling MBA you could ever undertake” – and focused on growth, impact and investment readiness – the cohort will engage in rigorous workshops, online meetups, mentor sessions, pitch training and investor presentations specifically designed to prepare the startups for scaling.

“We are delighted to be able to contribute to set up this pilot to fund and assist startups within agri-tech and climate-tech that can create jobs while contributing to food security, in a time where the needs, but also the opportunities, may be larger than ever. We hope that this could lead the way for more funding to flow into these important sectors in the future.”

Bernt Brun, Vice President and head of Funds

SOS Children’s Villages work to ensure that no child grows up alone. In 137 countries they work to strengthen families, provide alternative care, collaborate on strengthening communities and advocate for children’s rights. This is the first time the organization invests this way together with Norfund.

“Globally, for 9 out of 10 children brought into alternative care, the main cause is poverty. For the sake of the children, their families and society, we need to focus more on preventive measures. By joining Norfund in investing in African impact businesses through Katapult Africa, our funds can contribute to creating jobs and more sustainable communities, providing an even stronger safety net for children”, says Sissel Aarak, Secretary General of SOS Children’s Villages Norway.

Katapult has developed a method for rapid scaling of startups. In addition to investment the companies gain access to a global network of impact investors, mentors, experts, partners, and alumni. Katapult was founded in 2016 by impact investor Tharald Nustad. Since then, Katapult has invested in 145 impact tech startups and run ten accelerator programs, including several “impact unicorns”.

The Katapult Africa Accelerator Program is in partnership with Norad, Tony Blair Institute for Global Change, Norrsken, and Smart Africa, Rwanda Social Security Board, Norfund and SOS Children’s Villages.

“Our decision to launch Katapult in Africa is driven by both a clear recognition of the need for change and an unprecedented opportunity for innovation,” says Tharald Nustad, founder and majority owner of Katapult.

“We believe that it is Africa with its fast-growing business communities and young, tech-savvy population who are best placed to deliver highly scalable, highly impactful solutions. We’re very glad to have SOS Children’s Villages and Norfund alongside us helping new tech startups get the opportunity to grow.”

Tharald Nustad, founder and majority owner of Katapult

Norfund has a new Regional Director for Southern Africa, Pindie Nyandoro. With a background from banking, Pindie is a self-described enthusiastic newcomer to the Development Finance world. Her long career with companies like Unilever, Standard Bank Africa, Stanbic Bank Zimbabwe, and Standard Chartered Bank has now brought her to Norfund. While visiting the Oslo office she talked to Communication Adviser Indigo Trigg-Hauger about her journey to the new position and what excites her about Norfund.

What drew you to Norfund? 

I think I’ve always admired DFIs from a distance. When you’re African, and working with banks, you hear a lot about DFIs. So when the opportunity came, there was this history [for me]. It’s something I’ve always wanted to do. It coincided with the fact that I liked the developmental, the impact side, that DFIs tend to have as part of their mandate. 

One of the Norfund values is “make a difference”. How do you think we can make the most difference? 

I think because I am African, Zimbabwean by birth, I believe that as a general rule there is just too much to be done and not enough people to do it. So Norfund is well placed to play a fairly significant role in changing lives within the continent. Especially when you look at the more mundane things that people take for granted. By that I’m looking at access firstly to infrastructure, so if you look at things like transport, energy, water, I think there’s a lot that Norfund has done, continues to do, and can do going forward. Changing lives, if I can call it that. 

“I think there is a lot that can be done in terms of just making sure that the impact is actually noticeable and we are able to build on that as opposed to making a difference and then leaving it at that and starting something completely different. Build on what has been done in the past in making sure that the level of impact is a lot bigger than maybe what we have achieved previously.” 

What are you most excited to work with? 

People. I am a people person. I find it very easy to mix and get along with people. I feel I learn more from talking to people, not just formally, like in meetings, but over a bite. I’ve been training for the past three days, and the amount of knowledge I’ve learned about Norfund as an organization, Norway as a country, and other places like Thailand, Costa Rica, the other countries where we have a presence has been absolutely amazing. This knowledge has come via informal channels like lunch time chats as opposed to sitting behind a desk or in a formal meeting. 

I’ve only been in Norfund for two weeks, but one of the most outstanding things that I’ve noticed about Norfund is the number of young people within this organization. And for me, having been, I’ll call it “around the world” a few times, I think there is so much to learn from them. Of course,  I also have a lot to impart, so hopefully it a win – win outcome! So for me the its all about people, and we work through people, we achieve through people. Building those bridges and networks is going to be excellent. 

I’ve been amazed at the level of warm welcome I’ve had. Although I’ve met people for just a few days or one week, it feels like I have known them for months or years. I feel at home. I want to thank everyone for the very pleasant welcome I’ve had. I’m looking forward to being part and parcel of this amazing family. 

Norfund has committed a 10 million USD local currency equivalent, senior loan to Finsocial, a payroll discount lender in Colombia. The loans offered by Finsocial are used by teachers and pensioners for starting small businesses, further education and housing. 

Finsocial has a 175 million USD loan portfolio, and 800 employees in 27 offices spread over 20 provinces in Colombia.  

Accessing capital via loans and equity investments is crucial to economic growth and for the development of businesses. For individual households, loans and savings facilities help to reduce economic vulnerability.

In Colombia financial inclusion is low at 46% and even lower for women according to the Global Partnership for Financial Inclusion.

Norfund will also work with Finsocial to help it even further develop its gender strategy. Norfund is part of 2X Collaborative, engaging actively with peers to deliver tangible results with our partners on the ground. Finsocial is already meeting a few of the 2x criteria and has become a part of the collaborative.  

A partnership with Australian company New Forests at the helm will take over Norfund investee Green Resources as the first acquisition in plans to scale sustainable forestry in Sub-Saharan Africa.

At COP26 in Glasgow Norfund, British International Investments and Finnfund announced a new partnership called The African Forestry Impact Platform (AFIP). Managed by Australian investment company New Forests, the partnership aims to scale up sustainable forestry in Sub-Saharan Africa, with the aim of raising 500 million USD over the next the next two to three years. 

The partners have now signed subscription agreements for their investment in the fund for US$200 million, and announced AFIP’s first acquisition, Green Resources, East Africa’s largest forest development and wood processing company. After a challenging period for the company, Norfund and Finnfund became the majority owners of Green Resources in 2019. Since then, the company has turned a large deficit into positive results.  

“We are very satisfied with the results of this challenging but successful turnaround. With a new owner that can bring both capital and competence, we can create more jobs and a positive impact on the climate”.

Tellef Thorleifsson, Norfund CEO

Scaling sustainable forestry in Sub-Saharan Africa  

Norfund and Finnfund will reinvest the capital from the sale of the company into the new platform, which will also receive fresh capital from the other partners. 

“Norfund has extensive experience with partnerships in both energy and finance where we have used capital and competence from various actors to garner bigger results than each actor could have achieved on their own. Now we are confident that we can do the same in sustainable forestry”, says Thorleifsson. 

The partnership will invest in sustainable forestry in Africa where the approach combines protection of existing natural forests alongside responsible extension of productive working forests and forest restoration in the region.