February 25, 2025
An independent evaluation of Norfund’s energy investments shows that they have delivered good and sustainable results.
“We are pleased that such a comprehensive review confirms that Norfund’s energy investments have effectively delivered on access to energy and avoided emissions,” says Tellef Thorleifsson, CEO of Norfund.
The evaluation was conducted by KPMG on behalf of the Department for the Evaluation of Norwegian Development Cooperation, which was recently moved from Norad to Norec. The report covers investments in renewable energy under Norfund’s development mandate during the period 2015–2023, and under the Climate Investment Fund managed by Norfund from 2022–2023.
“I am pleased that the report shows that our focus on economic sustainability in the projects and efficiency in our own operations are important contributions to the good results,”
Tellef Thorleifsson
The report shows that Norfund’s investments have contributed to increased electricity production, improved access to renewable energy, and avoided greenhouse gas emissions in developing countries. In the years covered by the evaluation, Norfund contributed to financing more than 11 GW of new electricity production and enabled over 7 million households to gain access to electricity.
Recommends raising the targets for the Climate Investment Fund
It is estimated that the Climate Investment Fund’s investments will contribute to initiating energy production that will annually avoid 14.7 million tonnes of CO2, equivalent to 31% of Norwegian emissions in 2023. This is already more than the target Norfund had set for the period until 2026. The evaluation therefore recommends raising the target.
“We are pleased that the evaluation concludes that Norfund delivers results in line with the state’s goals for our mandates,” says Thorleifsson.
Already underway with the recommendation to invest in transmission
The evaluation also includes proposals for adjustments, including investing more in the power grid to reduce bottlenecks in energy development.
“The recommendation is in line with our own analyses, and we are already underway with investments in the power grid under both of our mandates,” says Thorleifsson.
He refers to recent investments in Zambia and India, but also points out that many of Norfund’s prioritized countries under the development mandate do not allow private investments in power grids.
Under the Climate Investment Fund, Norfund has made several significant investments in power grids. However, there is a challenge: no standard exists for calculating the climate impact of these.
“There is no doubt that there will be no energy transition without transmission, and we know that the climate impact of connecting more renewable energy to the grid through investments in power grids is significant, but for now, they are not included in the numbers we report for avoided emissions,” says Thorleifsson.