Prosperity is strongly linked to access to electricity. A reliable power supply is a prerequisite for establishing and developing the manufacturing and commercial sectors. Electricity can benefit individuals by paving the way for better health through a fresher indoor climate and more advanced health services. Some 1.6 billion people in the world today have no electricity. At the same time, developing energy production facilities is very capital-intensive. The International Energy Agency (IEA) estimates the need for investment in power production in developing countries to be USD 3 400 billion going forward to the year 2030. At present hydropower is one of the few renewable energy sources that can compete unsubsidized with fossil fuels. Thus hydropower will in many cases be the only real large-scale alternative to coal, oil and gas-based energy production. Developing hydropower facilities is time-consuming and capital- and expertise-intensive. This, coupled with challenging framework conditions, has led to the energy potential of most poor countries being grossly under-exploited. Norfund wishes to promote renewable energy production as a basis for economic growth and enhanced quality of life in developing countries. This is best done by investing in equity, mobilizing other capital and combining this investment with expertise and insight into the sector. The collaborations with Norwegian energy producers such as Statkraft, TrønderEnergi and BKK are examples of this. Norfund has a strong focus on the renewable energy sector. Norfund’s strategy is to mobilize sound technical partners while at the same time diversifying its portfolio. SN Power has shown that with the right combination of capital and expertise it is possible to deal with the many risk factors involved in making renewable energy investments commercially sustainable. The restructuring of SN Power, the establishment of SN Power AfriCA and the contributions from Statkraft, TrønderEnergi and BKK are sizable steps towards realizing Norfund’s strategy in this area.

Key figures at 31 December 2010

Portfolio

SN Power

Region: Globally
Instrument: Equity capital
Year of initial investment: 2002

SN Power was established in 2002 as a joint venture between Norfund and Statkraft. The company is a leading commercial investor and developer of hydropower projects in emerging markets.

In 2008 Statkraft and Norfund agreed on a new ownership structure for SN Power, according to which Statkraft increased its ownership share from 50 to 60 per cent, with an option of a further increase to 67 per cent before 2015.



Agua Imara (former SN Power AfriCA)

Region: Africa and Central America
Instrument: Equity
Year of initial investment: 2009

In 2009 SN Power and Norfund established SN Power AfriCA, which is a separate company for investment in Africa and Central America. BKK and TrønderEnergi bought into the company in 2009, and own 19 and 46 per cent respectively. The company is expected to make investments that will produce significant development effects, and develop the major potential for hydropower and wind power in the region.

In May 2011 the company changed its name to Agua Imara.



TronderPower Ltd

Region: Uganda
Instrument: Equity capital
Year of initial investment: 2008

Norfund and TrønderEnergi have jointly developed a power plant on a river in Bugoye in the western part of Uganda. The power plant opened in October 2009. Norfund owns 27.5 per cent and TrønderEnergi 72.5 per cent. Norfund has invested a total of NOK 55 million in this project. The power plant has a capacity of 13 MW and is expected to produce 82 GWh per year, equal to 6.4 per cent of total electricity sales in Uganda in 2008.

The project is registered in the green development mechanism and is expected to reduce annual CO2 emissions in Uganda by approximately 54 kilotonnes. Ugandan authorities will receive 60 per cent of the revenues from the sale of these CO2 quotas.

You can find further information at www.tronderenergi.no

Interactive Climate Change Facility – ICCF

Region: Global
Instrument: Loan
Year of initial investment: 2010

ICCF is a newly established co-investment facility involving the European Development Finance Institutions (EDFIs), Agence Française de Développement (AFD) and the European Investment Bank (EIB). ICCF will make climate friendly investments in the private sector in poor countries. It will demonstrate to private sector investors the financial attractiveness of climate-friendly projects in developing countries and will catalyze long-term investments. The initiative promotes the use of clean technology as an integral part of economic development. The facility contributes to sustainable economic development by providing long-term financing for renewable energy and energy efficiency projects in poor countries suffering from significant energy shortage/access.

ICCF builds on the successful model of European Financing Partners S.A. AFD, EIB and the EDFIs have committed EUR 300 million to the fund, of which Norfund EUR 5 million. It will fund private sector operations proposed by any of the EDFI shareholders. ICCF will finance up to 75% of a project proposal with a maximum of EUR 45 million, while the remaining 25% will be financed by the proposing EDFI member.

For more information, read the full press release here.

ToughStuff

Region: Africa
Instrument: Equity
Year of initial investment: 2011

ToughStuff has developed an inexpensive solar panel that can be used to charge a lamp, power a radio or charge cell phones. Since 2009, ToughStuff has sold over 700 000 products, mainly in Madagascar and East Africa. Norfund’s investment will contribute to a further expansion in Eastern, Southern and Western Africa. ToughStuff has ambitious growth targets and aims by 2015 to:

• Reach 35 million people with its products
• Save poor consumers USD 2.2 billion in energy costs, primarily related to paraffin, candles, batteries and the charging of mobile phones
• Create more than 10 000 jobs through its micro-enterprise program
• Reduce CO2 emissions by 1.7 million tonnes
• Prevent 291 million batteries being produced and improperly disposed of

E+Co

Region: Central America and Africa
Instrument: Loan
Year of initial investment: 2009

In 2009 Norfund signed a loan agreement of NOK 45 million with E+Co, which is a leading investor in small- and medium-sized energy corporations in developing countries. E+Co provides loans, equity capital and business support to energy entrepreneurs who invest in various types of clean energy, such as solar power, efficient cooking systems, biogas and small-scale hydropower plants. The loan facility from Norfund can be used for investments in Ghana, Tanzania, Senegal, Ethiopia, Mali, Zambia, Uganda, Kenya, South Africa, Lesotho, Costa Rica, Guatemala, El Salvador, Nicaragua, Honduras and Panama.