Norfund is investing ZAR 365m (ca. NOK 220m) in wind farms in South Africa under the new Norwegian Climate Investment Fund. Three wind farms with a total capacity of 420 MW will be built by EDF Renewables, and Norfund is investing in the project through its partnership with H1 Capital.

When the project is up and running, it will deliver more than 1400 GWh per year. Given South Africa’s current energy sources, with a majority coming from coal, the project will avoid more than 1.3 million tonnes of CO2 emissions per year – equivalent to the yearly emissions from 700,000 petrol cars in Norway. 

“I am delighted to see how Norfund is able to quickly contribute to fill some of the enormous need for more capital to speed up the transition to renewable energy in South Africa through the new climate investment fund and thus give vital contributions to global efforts to limit the climate crisis”

Minister of International Development Anne Beathe Tvinnereim

The Coleskop, San Kraal and Phezukomoya wind farms, each with a capacity of 140 MW, will be located in the Northern and Eastern Cape provinces, giving a combined capacity of 420 MW. EDF Renewables is developing these projects with its local B-BBEE (Broad-based Black Economic Empowerment) partners H1 Capital and GIBB-Crede. Norfund’s investment will contribute to the financing of H1 Capital’s investments in the projects.  

EDF Renewables plans to commission its wind farms between mid-2024 and early 2025. Each farm will consist of 26 wind turbines with a height of 124 m and a blade length of 83 m. The installations are expected to be capable of meeting the electricity needs of at least 193,000 South African households.  

Enormous need for investments in South Africa 

The 3 projects will sell power to Eskom, the South African utility. Wednesday this week, Eskom chief executive officer Andre de Ruyters said that to overcome the current energy crisis, the country will need to spend close to R1.2 trillion (725 billion NOK) by 2030 to ensure it has enough generation, transmission and distribution capacity to meet the demand, and that renewable energy is the quickest and most cost-effective way to resolve the country’s crisis. 

2 billion invested from the Climate Investment Fund 

With this new investment, Norfund will already have put more than 2 billion NOK to work under the new climate mandate that became operational in May.  

“The need for capital to cover the growing demand for power with renewable sources is enormous in all the priority countries for the climate investment fund, so we will very quickly be able to put to work the 10 billion that have been set aside over the next five years”

Tellef Thorleifsson, CEO of Norfund

The Climate Investment Fund will allocate 10 billion NOK over the next five years, with 1 billion coming from Norfund’s capital and 1 billion from the state budget each year. Since Norfund can advance parts of the fund that originate from Norfund’s own capital, the total amount in the fund could already reach 2.8 billion NOK by the end of 2022. 

Scatec, Norfund and partners will develop a 350 MW hydropower plant in Malawi. The project will increase security of supply, reduce energy shortages and help secure the country against floods.

Scatec today signed, on behalf of its joint venture with Norfund and BII, a binding agreement with the government of Malawi, EDF and the IFC to develop the Mpatamanga hydropower project.

The hydropower plant, which will be located on the Shire River in Malawi, will be composed of a 309 MW peaking plant and a 41 MW downstream plant. The facility will provide much needed energy during peak demand hours of the day and overall grid stability, with its ability to ramp up or down production to meet actual demand.

The development of hydropower that can balance affordable, but unstable, solar and wind energy is crucial for an energy sector based on renewables, and Malawi is dependent on increased power production and more stable energy access to develop the jobs needed to fight poverty

Tellef Thorleifsson, CEO Norfund

The project has been developed over several years by Norfund-owned SN Power, with support from Norad. Norfund sold SN Power to Scatec last year. As part of the agreement, a joint venture was set up where Norfund retained 49% of the company’s portfolio in Africa, and in June BII, the UK development finance institution, also joined the partnership. In this project, the joint venture together with EDF will be majority shareholders and own 55% of the project, while the Government of Malawi will own 30% and IFC 15%.

Mpatamanga will supply electricity to approximately two million people, and the partners estimate that it will avoid 520,000 tonnes of CO2 emissions per year. The power plant will also help to control the river and reduce the risk of floods, which are increasingly affecting Malawi. In January, flooding from the Tropical Storm Ana destroyed more than 70,000 hectares of crops, belonging to more than 90,000 households, further weakening Malawi’s food security.

The new Norwegian Climate Investment Fund, managed by Norfund, and KLP, Norway’s largest pension company, have entered into an agreement to take a 49% stake in a 420 MW solar power plant in India developed by Italian Enel. With the investment, Norfund has within a short time put a total of NOK 1.8 billion to work to avoid greenhouse gas emissions through the new fund.

Norfund and KLP together will take a 49% stake in the solar energy project Thar Surya 1 for approximately 2.8bn INR. The 420 MW_DC   (300 MW_AC) new solar power plant is being built in Rajasthan in India by Italian Enel Green Power.

“This summer with extreme heat and drought in many parts of the world has shown us, more clearly than ever, there is no time to waste in the fight against climate change. That is why it is such good news that in record time the climate investment fund’s money is already working for these crucial investments in renewable energy in developing countries”

Minister of International Development Anne Beathe Tvinnereim

The climate investment fund will allocate 10 billion NOK over the next five years, with 1 billion coming from Norfund’s capital and 1 billion from the state budget each year. Since Norfund can advance parts of the fund that originate from Norfund’s own capital, the total amount in the fund could already reach 2.8 billion NOK by the end of 2022.

Enormous need for investment in India 

When the project is up and running it will deliver more than 750 GWh per year. Given India’s current energy sources, with a considerable proportion coming from coal, the project will avoid more than 615,000 tonnes of Co2 emissions per year – equivalent to the yearly emissions from 316,000 petrol cars in Norway. 

“We are extremely glad to have this large-scale investment in place. If India is to base its energy needs on renewables there is an enormous need for capital, which we are contributing to in part with the new climate investment fund,” says Tellef Thorleifsson, CEO of Norfund. 

According to a new report from BloombergNEF (BNEF) India needs 233 billion USD in investment to meet its goals for development of wind and solar energy by 2030. IEA’s “‘India Energy Outlook 2021’” shows India will have the greatest need in the world for growth in the energy sector.

“When there is such a large need it is important that we use public money in a way that also triggers the mobilisation of private capital. Having KLP on board with Norfund in this investment is an inspiring example,” says Tvinnereim. 

“KLP and Norfund have been investing in developing countries together for a decade, and we are very excited to enter a market like India where there is such a great need for renewable energy. Cutting emissions to meet the Paris Agreement will require phasing out coal. KLP has a goal to increase climate-friendly investments by at least six billion NOK every year. The effect on the environment is positive, and provides returns to our owners,” says Sverre Thornes, CEO at KLP. 

Strategic cooperation with Enel 

Norfund has entered a strategic investment partnership with Italian Enel Green Power in India.

“This is the first investment we have done with Enel, and together we have great ambitions to contribute with similar investments in India in the years to come,” says Thorleifsson. 

Relevant articles:

Despite the Covid-19 pandemic hitting the developing countries hard and global direct investments in developing countries falling by 12% in 2020, Norfund’s investments increased by 20% compared with the previous year to a record high NOK 4.8 billion. Read more about Norfund’s financial results, development effects and organization in our website report.

You can also download our annual report as a PDF:

Norfund invests USD 8 million in Integra Partners Fund II, a fund aimed at empowering tech entrepreneurs to drive access and affordability to responsible financial services in Southeast Asia.

Launched in 2017, Integra Partners is a multi-disciplinary sector-focused venture capital fund manager based in Singapore (“Integra”). Norfund is now investing USD 8 million in Integra’s second VC fund, Integra Partners Fund II LP (“The Fund”), which focuses on investing in early-stage technology companies operating in Southeast Asia in the financial services, insurance and healthcare sectors.

Norfund’s investment will provide capital to early growth stage FinTech companies and hence improve access to financial services for underserved population in some of Norfund’s core countries. With its proven track record and specific sector focus, Integra is able to leverage upon its unique position in Southeast Asia’s venture community to identify and access early-stage opportunities in target markets.

The Fund will focus on investments in FinTech, InsurTech, and digital health, three sectors that Integra believes are inter-dependent, enabling them to take advantage of cross-sector opportunities.

The investment is part of a Norfund strategy to support tech-enabled financial inclusion companies at the early growth stage.

We are honoured that Norfund has chosen to commit to Integra Partners Fund II. We look forward to our partnership, and thank the entire Norfund team for their support in driving access and affordability of responsible financial services and digital health in the region

Chris Kaptein, Managing Partner at Integra Partners

1 out of 4 don’t have access to a bank account

Access to high quality, affordable financial services is essential for social and economic development, gender equality, resilience, and livelihoods. According to new data from the World Bank, only 76 percent of the global population have a bank account —and 71 percent of people in developing countries.

There is also a gender gap – in 2021, 74 percent of men but only 68 percent of women in developing economies had an account.

At the same time, more than 90% of the world’s population has a mobile phone, and the report shows that mobile money already has made a difference in increasing account ownership. FinTech can also increase the breadth of available financial services.

Great opportunities in FinTech

Norfund sees great opportunities in FinTech companies and have recently also done several direct investments. This month, Norfund committed a loan to Wave Mobile Money, a FinTech company that operates in Senegal and Côte d’Ivoire. Last year, Norfund committed 65.4 million NOK to Amartha, a peer-to-peer lending platform in Indonesia with a focus on funding rural women, and 41.3 million NOK was committed in a loan to Lula Lend, a technology driven financial institution with a credit scoring model that enables them to more efficiently assess the risk of SMEs in South Africa.

Norfund and KLP to invest in CrossBoundary Energy to expand the company’s C&I portfolio across Africa.

Norfund and KLP, Norway’s largest pension company, will together invest USD 40 million in equity in CrossBoundary Energy (CBE), a leading developer, owner, and operator of commercial and industrial renewable energy systems in Africa. The investment will be made through the joint company KLP Norfund Investments AS.

This commitment will allow CrossBoundary Energy to further scale its investments in renewable energy solutions for commercial and industrial businesses across Africa.

The $40M commitment is a continuation of Norfund and KLP’s earlier investments in the C&I sector and endorses the scale and maturity of the distributed generation sector in Africa.

CrossBoundary Energy provides tailored, fully financed renewable energy solutions to its corporate customers, allowing them to avoid upfront capital expenditure and technical risks, whilst still benefitting from cheaper, cleaner, and more reliable power.

CrossBoundary Energy is currently delivering a portfolio of $188M in projects for 30 corporate customers across 14 countries in Africa, comprising 150 MWp of solar PV assets, 50 MWh of battery energy storage assets, and 12 MW of wind assets.

CrossBoundary Energy is the renewable energy provider of choice for a number of market-leading companies present in Africa, including Unilever, Diageo, Rio Tinto, Heineken, and AB InBev.

We are very excited to welcome Norfund and KLP as investors. Their commitment is aligned with our belief that the business sector across Africa should be able to benefit from cheaper, cleaner and more reliable power. This investment validates CrossBoundary Energy’s position as a trusted provider of customer-centric renewable energy solutions to the African business community. We look forward to drawing on Norfund’s significant experience as seek to deliver an operational portfolio of over $300M in assets within the next 5 years.

Pieter Joubert, President and Chief Investment Officer, CrossBoundary Energy

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British International Investment will invest up to 200 million USD into the joint venture between Norfund and Scatec to jointly provide capital to develop Africa’s hydropower sector. Norfund commits a further 100 million USD.

“It’s great to announce that BII is putting 160 million pounds into hydropower in Africa, creating 180,000 jobs,” said Prime Minister Boris Johnson when announcing the deal at the Commonwealth Business Forum in Rwanda. “I see a fantastic future for all of us in these initiatives. We want to be the partner of choice for our African friends as you transform millions of lives.”

Last year Norfund sold SN Power, a 20-year project which had become a powerful actor in hydropower in developing countries, to Scatec. As part of the agreement Norfund retained 49% ownership in the company’s portfolio in Africa as a joint venture. Now BII, the UK development finance institution, is joining the partnership.

Norfund has been developing hydropower since the fund’s inception. This will however be the largest investment in hydropower in BII’s 74-year history, with up to $200m of capital committed over the next several years. Norfund is seeding the partnership with their existing share in their joint venture with Scatec and further capital commitments of up to $100m over the next several years. The investment extends and compliments BII’s and Norfund’s existing commitments and partnerships to powering Africa, through Globeleq, a 2.3GW IPP company in which BII and Norfund are shareholders, and the joint investment the two development finance institutions have in H1 Capital – a South-African black-owned and managed renewables investment and development company.

Norfund and BII now together hold a 49% stake in Scatec’s African hydropower portfolio, which includes a mixture of operating assets as well as a number of assets under development, including the proposed 205MW Ruzizi III hydropower plant, which will provide power to Rwanda, Burundi and DRC, the 120MW Volobe hydropower plant in Madagascar and the 350MW Mpatamanga project in Malawi among others. All assets under development are aligned with the Paris agreement and demonstrate the partnership’s commitment to supporting the respective countries in their net zero pathways.   

The projects are expected to support the creation of 180,000 jobs, avoid at least 270,000 tCO2e of GHG emissions annually, and could provide enough clean electricity to meet the equivalent demand of over 3 million people. 

“If we are going to succeed at stopping climate change and fighting poverty, we must bring climate and development policies closer together. I am glad that the UK is now joining this work by creating renewable energy and economic growth in some of the poorest countries in Africa”

Minister of International Development Anne Beathe Tvinnereim.

“The expansion of dispatchable renewables is critical to support the integration of more wind and solar energy in Africa. We are delighted to be able to join forces with BII in our partnership with Scatec, to further scale up our ability to provide clean and affordable energy through hydropower, enabling economic development and job creation, while avoiding emissions,” says Mark Davis, Executive Vice President Clean Energy in Norfund. 

In May this year, Norfund was certified as an Eco-Lighthouse!

The Eco-Lighthouse certification scheme is a concrete and effective tool that helps us make smart and profitable environmental choices. To achieve certification under the Eco-Lighthouse scheme, Norfund had to satisfy both the General Industry Criteria, the canteen criteria and the criteria specific to the finance sector.

CO2 footprint for Norfund’s own operations equaled 257,13 tons of CO2 in 2021. As 2021 was not a normal year for Norfund, and travel was restricted to a minimum, we have reported on 2019 emissions as well, where our operations equaled 919,38 tons of CO2. 

Some of the members of the working group visited Franzefoss at Haraldrud some weeks ago, to get an understanding of the waste process from being collected at our office to being recycled (pictured).

For 2021, Norfund reports for the Oslo office only. Our aim for 2022 is to be able to report on behalf of the whole organisation. 

Kudos to the working group Santhosigan Thamotharampillai, Elida Nordgaard Unneberg, Kari Offerdal, Peder Heiberg Sverdrup, and Andrea Kristin Edlund, who have been working pragmatically on improvements since January!

Norfund invests in a new financing vehicle that is the largest off-balance-sheet financing facility of its kind in the industry, paving the way for d.light to sustainably expand its operations across Africa.

Norfund’s invests in the new facility together with the U. S. International Development Finance Corporation (DFC), responsAbility’s managed Funds, and Oikocredit.

Since 2016, Norfund has been an equity investor in d.light – one of the largest players in off-grid solar energy. Last year Norfund also joined DFC as a senior lender in the BLK1 structure, which is a local currency impact financing vehicle dedicated to providing d.light’s solar home systems business with access to on-going, flexible and sustainable receivables funding.

Flexible working capital

The new BLK2 structure is an off-balance sheet financing vehicle that provides d.light with flexible working capital, enabling the company to provide consumer financing and make its products universally available and affordable for customers, most of whom live below the poverty line and lack access to reliable power.

The facility will finance a range of products that drive quality-of-life improvements, from solar home systems to high-efficiency appliances and smartphones. BLK2 is the largest off-balance-sheet facility in the industry thus far, and comes on the heels of d.light celebrating 125 million lives impacted globally.

BLK 2 has been structured to provide d.light with multi-currency financing up to the equivalent of USD 238 million in face value of receivables over a two-year commitment period, giving the company continued access to sustainable and affordable receivable financing for its Kenyan business with a plan to expand to other African countries in the near future.

The structure is expected to directly impact over 2.8 million lives including the over 1.9 million people with improved access to clean and modern energy who, together, will reduce over 600,000 tons of CO2 emissions.

Providing energy to millions of new households

Norfund’s newly released report on operations, shows that Norfund’s investees provided 3.5 million new households with access to electricity in 2021. The increase is mainly due to solar home systems providing energy directly to people living outside the grid.

The needs are great however. According to the IEA, the number of people without access to energy increased by 2% to 768 million in 2021, after annual declines from 1.6 billion in 2000. The increase is primarily in Africa, where the development has not kept pace with population growth following the pandemic.