A new evaluation shows that Norfund has achieved good results with its investments in renewable energy, but there is still room for improvement

The evaluation recommends that Norfund focus more on strengthening power grids by considering investments that can reduce bottlenecks in the utilisation of generated electricity, improve reporting on development effects and emissions reductions, and set more ambitious targets for the Climate Investment Fund.

Key Findings

The evaluation, conducted by KPMG Norway on behalf of the Evaluation Department for Norwegian Development Cooperation — recently moved from Norad to Norec — covers Norfund’s renewable energy investments from 2015 to 2023. It highlights that during this period, Norfund’s investments have led to:

  • Increased electricity production — Norfund has financed more than 11GW of new electricity capacity.
  • Better access to renewable energy — Over 7 million households have gained access to electricity from renewable sources.
  • Climate benefits — The investments are estimated to contribute to energy production that will avoid 14.7 million tons of CO2 emissions annually, equivalent to 31% of Norway’s emissions in 2023.

The evaluation confirms that Norfund’s investments have been crucial in realising projects that would not have been implemented otherwise. At the same time, the report recommends that the company prioritise investments in more challenging markets, where the lack of capital is greatest.

“We are pleased that such a thorough review of our energy investments confirms that they have delivered the desired results in terms of energy access and avoided emissions. I am particularly glad that the report shows our efforts to ensure the financial sustainability of projects and efficiency in our operations have yielded good results,” said Tellef Thorleifsson, CEO of Norfund.

Based on the evaluation, the Independent Evaluation Department for Norwegian Development Cooperation recommends that the Ministry of Foreign Affairs address the following with Norfund:

  • More ambitious climate targets — The goals and priorities for the Climate Investment Fund should be set more ambitiously to maximise climate benefits and ensure additionality.
  • Greater focus on power grids — Investments that reduce bottlenecks in the power grid should be prioritised to ensure that generated electricity reaches consumers and that energy production delivers maximum development effects.
  • Promoting good corporate governance — Norfund should set clearer expectations for good corporate governance in the companies it invests in.
  • Improved reporting — Norfund’s reporting on development effects and emissions reductions should better distinguish between expected and actual results and consider the company’s ownership share.

“The Evaluation Department sees this report as an important contribution to the further development of Norfund’s investment strategy and looks forward to discussions with the Ministry of Foreign Affairs and Norfund on following up on the findings,” said Henrik Nordal, Director of the Independent Evaluation Department for Norwegian Development Cooperation.

Additional Information

  • The full evaluation report, Norfund’s comments, the transmittal letter from the Evaluation Department for Norwegian Development Cooperation, and the Ministry of Foreign Affairs’ comments can be found here.
  • The evaluation report will be launched on Wednesday, Feb 26, 2025, at 09:00 AM at the National Theatre Conference Center in Oslo, Norway. You can follow the launch digitally here.

The main findings of the evaluation will be presented, followed by a panel discussion. Thomas Fugelsnes from KPMG will present the evaluation findings, Tellef Thorleifsson will provide Norfund’s comments, and the Independent Evaluation Department for Norwegian Development Cooperation will review the recommendations. The Ministry of Foreign Affairs will be represented by State Secretary Stine Renate Håheim, who will provide comments from the MFA.

The panel discussion on trade-offs in Norfund’s investments will be moderated by Jostein Tellnes, with participants including Paul Bjørdal (Deputy Director, MFA), Ylva Lindberg (EVP Strategy and Communication, Norfund), Karoline Andaur (CEO, WWF), and Thomas Fugelsnes (KPMG).

For more information, contact:

Henrik Nordal, Director of the Independent Evaluation Department of Norwegian Development Cooperation

Phone: 99 28 43 09

Live stream of the launch 26 February 9.00
Download and read the full evaluation