Norfund is an active, strategic minority investor. We offer risk capital and expertise to help building sustainable businesses in poor countries.
Norfund aims to invest in countries where we can have the greatest impact. In countries where the private sector is weak and access to capital is scarce. This is primarily in Sub-Saharan Africa, but also in some countries in South East Asia and Central America.
Norfund also invests in some specialised SME funds to support small and medium sized companies in developing countries.
Geographical investment areas: Norfund's priority region is Africa, with main focus on Sub-Saharan Africa and Ghana. Selected countries in Central America and South East Asia might also be relevant. Overview of existing investments in relevant countries can be found in the investment table.
Financial instruments: Norfund gives priority to equity investments because euity is the scarcest type of capital in most developing countries. Equity investments are normally from USD 4 million and above. Norfund takes maximum 35% ownership share. Norfund also offers loan to selected companies.
Investment horizon is normally from five to ten years.
Norfund offers risk capital
Equity: Norfund's equity investments are from about NOK 20 million (4 million USD) and above. The fund takes maximum 35% ownership share. That is, the projects normally have a total equity of NOK 100 million and above. Norfund takes a position as an active owner, and follows the development of the company closely.
Loans: Norfund normally only offers loans to companies in which the fund already has an equity position. But the fund can offer ordinary loans to financial institutions like banks, or in some cases to other companies (e.g. small, Norwegian enterprises; see below). The loans are in the same size range as equity positions.
SME funds (private equity funds): In addition to investing directly in companies with equity and or loans, Norfund invests equity indirectly through SME funds. Norfund invests in funds that have an investment strategy aligned with the Norfund strategy, that is funds that work to develop local small and medium sized enterprises in the Norfund geographies. The SME fund positions are in the same size range as the direct equity investments.
Overview of Norfund's financial instruments, Total portfolio as of 31.12.2016:
Norfund offers expertise and active ownership
To maximise financial and developmental success in the investee companies, Norfund strives to be a value adding owner beyond the mere capital investment. Norfund’s investment teams have extensive experience in project development and governance, and works closely with the partners to develop the companies.