Norfund creates jobs and improves lives by investing in businesses that drive sustainable development. The establishment and growth of sustainable businesses have been the main drivers of global efforts to reduce poverty over the past 25 years.
Some highlights from 2021*
created in 2021
new generation capacity financed in 2021
offered financial services in 2021
taxes paid by portfolio companies in 2021
Companies create jobs, pay taxes and supply goods to communities.
In most developing countries, the lack of access to capital is the main barrier to the establishment and growth of businesses. The growth of companies in these settings depends on risk-willing and patient investors.
Norfund contributes to the establishment and growth of sustainable companies that would not otherwise be initiated because of the high levels of risk involved.
Before any investment decision is taken, the development impact of a project is carefully considered. We invest only if a project is deemed to be commercially viable – as this is a prerequisite for creating lasting impact. The investment must also be additional.
Norfund’s investments are contributing to the achievement of the UN’s Sustainable Development Goals
Creating jobs

Jobs are vital to reducing poverty. 470 million new jobs must be created by 2030 if we are to achieve the development goals. Jobs generate income and help people to improve their knowledge and skills. We create jobs directly through Norfund’s portfolio companies and indirectly through the supply chains of these companies.
Increasing energy access and supply

Economic and social development depends on a reliable and stable electricity supply. In Africa, 600 million people lack access to electricity. 40 percent of businesses in Sub-Saharan Africa report that access to energy is a major operational constraint. Power shortages are holding back economic growth and job creation, as well as the provision of education and health services.
of the adult population in Sub-Saharan Africa are unbanked
of firms in Sub-Saharan Africa have a bank loan/line of credit
Strengthening financial inclusion

67 percent of the adult population in Sub-Saharan Africa are unbanked, and only 21 percent of firms in the region have a bank loan/line of credit. Investments in financial institutions are clearly needed.
Despite these needs and the potential opportunities, private investors are often reluctant to invest in financial institutions because of reputational risks and perceived financial risks.
Tax revenue generation

Domestic resource mobilisation is an important way to facilitate sustainable development. A tax base provides governments with essential resources to spend on infrastructure and public services, such as health and education.
Taxes and fees are paid by Norfund’s portfolio companies in the countries in which they operate, as well as by other companies in their value chains.
Our Investment Areas
Impact management
We collect and monitor data continuously on the development impact indicators of Norfund portfolio companies. The companies report on the direct effects of their operations, based on the Harmonised Indicators for Private Sector Operations. These metrics identify both sector-specific effects (for example, energy production or financial services) and portfolio-wide effects (jobs, local purchases, and taxes).
Harmonised indicators for Private Sector Operations
Each year, Norfund collects data on development effects from our investees. Where available, we apply harmonised indicators for private sector operations, including on direct jobs, to reduce the reporting burden of investees and ensure comparability and transparency in development effects reported. Where available, Norfund applies indicators covered in the Harmonized Indicators for Private Sector Operations (HIPSO) and EDFI’s Harmonisation Initiative.
HIPSO is a collaboration among DFIs and IFIs with efforts initiated in 2008 to identify common development indicators. The first indicators were launched in 2013 and the total number of HIPSO indicators is now 44, with additional indicators under consideration. In addition, the Joint Impact Indicators, a sub-set of HIPSO indicators and the IRIS Catalog of Metrics, on Gender, Jobs, and Climate were recently launched in cooperation with the GIIN as further step forward for harmonised impact measurement and reporting.
In addition, Norfund participates in the EDFI Harmonisation Initiative on Impact Measurement and Responsible Financing (the Harmonisation Initiative), established in 2019 to facilitate consolidated EDFI reporting of key impacts, including open publication of many metrics. The initiative set out to focus on five key impacts to which private sector enterprises contribute, including Gender Equality (SDG 5), Decent Work and Economic Growth (SDG 8), Reduced Inequality (SDG 10), and Climate Action (SDG 13).
More info: https://indicators.ifipartnership.org
In addition, the case studies and independent evaluations we support give us valuable insights into the indirect development effects of our investments, such as the effects of job creation in the value chain, and the productivity effects of power generation.
Operating Principles for Impact Management
Norfund is a founding signatory to the Operating Principles for Impact Management. These principles provide a reference point against which the impact management systems of funds and institutions may be assessed. They draw on best practices from a range of asset managers, asset owners, asset allocators and development finance institutions and define nine Operating Principles. These principles address different stages of an impact investment that need to be carefully followed up.
Theory of Change
Norfund uses a methodology known as the Theory of Change for planning and evaluation. The Theory describes how and why a desired change is expected to happen. We have developed theories of change for each sector in which Norfund works, to explain the relationship between the input we provide to clients, the link to the Sustainable Development Goals, and the overall impact that we wish to achieve. These theories of change highlight other relevant effects of our investments.
Each theory of change has three components:
- A narrative that includes a problem statement, a hypothesis of change, and an assessment of the evidence base
- A diagram visualising the causal pathway, and details of the intermediary steps
- A framework for monitoring and evaluation