During the due diligence phase we assess issues such as:

  • The quality of the project and its execution strategy
  • The financial records and model
  • The project market; demand and competition
  • The management team
  • Alignment with the other shareholders
  • Environmental and Social (E&S) risks  and mitigation plans, guided by the IFC standards
  • Legal and corporate structures

Third-party verification is usually also required (feasibility studies, market assessments, E&S impact assessments).

Assessment of business integrity

A thorough review of the partners that will be involved in a project is essential in the due diligence phase. A detailed overview of the ownership structure is always required. An Business Integrity Check may be required if any uncertainties or Politically Exposed Persons (PEP) are identified.

The company’s willingness to improve its standards and practices according to IFC Performance standards  is an important element of the due diligence process. The IFC standards include provisions for issues such as workers’ rights, anti-discrimination and equal opportunities, health and safety, biodiversity, land acquisitions, and relationships with local communities.


During our negotiations with potential partners, Norfund reviews the appropriate investment instruments and the terms of the investment. Before a final investment decision is made, Norfund will discuss a range of issues with clients, including Norfund’s share of the investment, the price mechanisms, corporate governance, environmental and social impact, and Norfund’s exit strategy.

Norfund always invests together with other partners. Negotiations therefore typically include the need to find common ground between several parties, each of which may have different perspectives and objectives.

Final approval

A Final Approval investment paper is based on the due diligence assessment and an agreed term sheet outlining the structure of a proposed investment. Larger investments and projects considered to be high-risk also require approval by Norfund’s Board of Directors. Investment decisions for all other projects are delegated to the Managing Director of Norfund and to Norfund’s Investment Committee.