Private equity fund Norfund shifts focus to West Africa – CEO

Investing mostly in Sub-Saharan Africa, it had $1.95 billion in commitments and had invested in over 770 firms by the end of 2016, focusing on renewables, agriculture and the financial industry.

OSLO: Private equity company Norfund is turning its attention to West Africa to balance its regional spread after focusing on the continent’s south and east in the past decade, its CEO said.

Norfund was set up by the Norwegian government in 1997 to help the economic development of poor countries by providing capital to local companies.

Investing mostly in Sub-Saharan Africa, it had $1.95 billion in commitments and had invested in over 770 firms by the end of 2016, focusing on renewables, agriculture and the financial industry.

“Now we are moving carefully into West Africa, starting to invest in Ghana and in the region,” Kjell Roland told Reuters in an interview on the sidelines of a conference.

“Norfund core capital is growing and we are by now highly exposed to East Africa,” he said, explaining the company’s westward shift.

Norfund has opened an office in Ghana’s capital Accra to add to its offices in Maputo, Mozambique and Nairobi, Kenya.

It will increase staff and start looking for investments in the food and agricultural value chain in Ghana.

In addition, Roland said the fund would “look for projects in the region with an emphasis on the English-speaking countries.” He said this would include energy ventures.

Across sub-Saharan Africa, Norfund wants to be an active anchor investor in locally owned, mostly medium-sized banks.

“I would expect in this year and next year you will see two, perhaps three investments in banks (in Sub-Saharan Africa),” Roland said, adding that Norfund aimed to be the biggest investor, holding up to 40 percent.

Norfund would work to improve the IT systems and risk assessment of the banks it will acquire, he said.

“To these banks we are planning to invest a total of $1 billion, $750 million from existing assets and $250 million as investment commitments,” he added.

Investing in energy, Norfund is planning to set up an office in Kigali, Rwanda to develop a 150 megawatt (MW) hydropower plant on its border with the Democratic Republic of Congo.

“The hope is that over the next one to two years we will … close a couple of deals and start building hydropower large-scale in Africa,” he said.

In the field of solar power, Norfund has been looking at new power plants in Ethiopia, is concluding a 40 MW power plant deal in Mozambique and is targeting more projects with Norway’s Scatec Solar in Egypt and South Africa.

“We hope to be able to close a deal in a 40 MW solar plant in Mozambique over the next few weeks,” Roland said.

Source: Reuters