Norfund's project cycle begins with the identification of investment opportunities.
Each year we are approached by companies seeking finance for establishing or growing businesses in low- and middle-income countries. We also search the market actively for projects that fit our mandate.
Initial project screening
The initial screening of potential investments is primarily a desk-based exercise in which we review material received from project promoters. The project must fit with Norfund’s sectoral and geographical priorities and our investment share range (usually USD 5-15 mill). Projects are then assessed against the EDFI exclusion list.
During the first stage of project screening, Norfund considers the additionality and sustainability of the potential investment as well as the potential catalytic effect.
Our partners and co-investors are closely assessed to ensure they are able to support the high standards Norfund demand. Shareholders, board members and the senior management of the partners must also be clearly identified.
Clearance in Principle
If a project fits our strategic priorities and passes the first screening stage, Norfund’s project team prepares a first investment paper which is presented to Norfund’s Investment Committee.
Norfund’s Investment Committee is an advisory body which reports to Norfund’s Managing Director, and is chaired by an external expert to ensure the independence of its assessments. If the Investment Committee approves the Clearance in Principle proposal, the potential project then progresses to a due diligence phase.