The Norwegian Investment Fund for developing countries (Norfund) invested just over 6.5 billion NOK in developing countries in 2023, with 51% of investments in Africa. 

This is as much as the record year 2022, despite the fall in the world’s total investments.

“We have succeeded in maintaining a high level of our contributions to creating more jobs in some of the most challenging countries where high risk makes many investors hesitant to invest,” said Teller Thorleifsson, CEO at Norfund. 

Above the development mandate, Norfund invested a further NOK 1.4bn in renewable energy. 

Norfund invested 2.3 billion in companies within financial inclusion, NOK 812m in companies within agriculture and industry, and NOK 412m in local and regional funds that invest directly in companies.

Of Norfund’s total committed portfolio, 62% was in Africa at the turn of the year.

“Through investments that provide access to energy and capital, as well as direct ownership in companies, we see that we can contribute to fighting poverty in an efficient, sustainable and scalable way,”said Thorleifsson.

Total foreign direct investment to developing countries fell last year by 9% to $841bn, with a drop of 12% in developing countries in Asia and 1% in Africa, according to a report by UNCTAD.

Norfund’s investments have seen steady growth in recent years, despite demanding times characterized by, among other things, the pandemic. 

In 2020, investments increased by 20%, in 2021 by 10% and in 2022 by another 20%. In 2023, the record level of 6.5bn from the year was thus maintained. 

Norfund’s total committed portfolio was NOK36.2bn at the end of the year.

Over the past two years, Norfund has received NOK1.68bn for the fund’s development mandate and one billion for the Climate Investment Fund over the aid budget. 

The total annual investments are now 2.5 times the amount transferred from the state budget, as a result of freed up funds from returns and sales.

“By investing instead of giving the money away, we mobilize private capital and use the same funds several times, so we can help fight more poverty and climate change,” said Thorleifsson.

Norfund was given responsibility for the new Climate Investment Fund aimed at avoiding emissions in developing countries in 2022. 

In 2023, Norfund invested NOK 1.6bn over this mandate in renewable energy in countries with a particularly high proportion of fossil energy in existing and planned power production.

“The need for capital for renewable energy in these markets has grown further as a result of more expensive capital and high gas prices, and we see great opportunities to make a significant difference,” commented Thorleifsson.