20 years of investing for development September 2017 Kjell Roland

Transcription

1 20 years of investing for development September 2017 Kjell Roland 1

2 STORYLINE HISTORY: The new kid on the block MARKETS: Investing along a bumpy road STRATEGY: An active, strategic minority investor NORFUND: Next steps 2

3 NORFUND HISTORY: THE NEW KID ON THE BLOCK

4 THE NEW KID 4

5 LESSONS FROM HISTORY 1852: Kongeriket Norges Hypotekbank Farm in Norway 19th century Farm in Norway 19th century Cambodia

6 LESSONS FROM HISTORY 1919: Statens Fiskarbank Lofoten 1928 India

7 LESSONS FROM HISTORY 1936: Den norske industribank Norway 1930s South Africa

8 LESSONS FROM HISTORY 1965: Statens landbruksbank Norway 1960s Africa

9 LESSONS FROM HISTORY 9

10 THE NEW KID 10

11 NORWAY A LATE-COMER TO DEVELOPMENT FINANCE

12 SOLID GROWTH IN DEVELOPMENT FINANCE INSTITUTIONS 12

13 NORFUND GROWTH STORY MNOK Norfund act and Governance A potent plattform for Norfund becoming a stable and predictable equity partner 20 years of 20% annual growth 13

14 NORFUND GROWTH STORY MNOK Supported by all governments and parties in Parliament 14

15 THE NEW DEVELOPMENT AGENDA: BILLIONS TO TRILLIONS In poor countries, as in Norway before, «næringsutvikling» is fundamental Need to go beyond grant based aid Why private sector development Jobs Local businesses Taxes Skills/competence Entrepreneurship 15

16 NORFUND MARKETS: INVESTING ALONG A BUMPY ROAD

17 THE GOLDEN AGE IN DEVELOPMENT Number of poor (at $1.90) Number of poor Annual GDP growth Annual GDP growth in DC (%) THE GOLDEN AGE BUMPY ROAD

18 THE GOLDEN AGE IN DEVELOPMENT Number of poor (at $1.90) Why? End of Cold War Stability and democracy Foreign Direct Investments Number of people in extreme poverty fell by 130,000 every day Child mortality more than halved School enrolment passed 90 % Economic growth THE GOLDEN AGE Annual GDP growth Number of poor BUMPY ROAD Annual GDP growth in DC (%) 18

19 BUMPY ROAD - IMPACT ON PORTFOLIO Norfund portfolio Political stability Government debt Ease of doing business BNOK Deteriorated Stable Improved BNOK Increased Stable Decreased BNOK Deteriorated Stable Improved Source: Business Monitor International Source: Business Monitor International Source: World Bank Group 19

20 INCLUSIVE GROWTH ALL ABOUT JOBS 70% of the poor say getting a job is the best way to escape poverty Africa will add 122 million people to labor force between 2010 and 2020 Only 28% of Africa s labor force has stable wage-paying jobs 20

21 THE BUMPY ROAD IN A CHANGING LANDSCAPE Challenges but also opportunities Lower and less inclusive growth Conflict affected countries Increasing youth unemployment Growing impact of climate change South south trade and investment Increasing regional trade New donors new ideas Local savings for PE and infrastructure Decoupling financial markets 21

22 NORFUND STRATEGY: AN ACTIVE, STRATEGIC MINORITY INVESTOR

23 WHAT WE AIM TO DO Build to scale and take private sector instruments to fragile states 23

24 WHAT WE AIM TO DO Build to scale and take private sector instruments to fragile states 24

25 NORFUND STRATEGY ACTIVE, STRATEGIC MINORITY INVESTOR Direct investments Serve on boards Work with management Build industrial based portfolio companies 85% equity investments 25

26 NORFUND STRATEGY ACTIVE, STRATEGIC MINORITY INVESTOR Build country knowledge and sector skills to maximize development CLEAN ENERGY FINANCIAL INSTITUTIONS FOOD AND AGRIBUSINESS SME FUNDS 26

27 NORFUND STRATEGY ACTIVE, STRATEGIC MINORITY INVESTOR Always with partners 27

28 ADDITIONAL: WHERE OUR CAPITAL HITS THE GROUND 80% 70% 60% 50% 40% FDI flows less about poor countries than before Share of investments by income group 70% 30% 20% 10% 0% 23% FDI flows 6% 1% Low income Lower middle income Upper middle income High income Source: World Bank Group 28

29 FIGHTING POVERTY IS OUR MANDATE Share of portfolio 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 33% Norfund 21% 11% Least Developed Countries EDFI IFC 85% 52% 49% 50% 30% 26% 20% 16% Infrastructure Africa Equity 23% *Infrastructure = energy only for Norfund, total investments in infrastructure for IFC and EDFI *LDC share for IFC= IDA countries, share of commitments in

30 NORWAY $ NORFUND TEAM RETURN ON OUR INVESTMENT 9.2% IRR in NOK DEVELOP SUSTAINABLE ENTERPRISES 770 companies NOK 10.9 billion paid TAXES 19.2 TWh electricity 11 million loans provided to clients JOBS GOODS AND SERVICES 19 billion NOK to suppliers 276,000 jobs 30

31 NORFUND: NEXT STEPS

32 NORFUND ORGANIZATION WELL POSITIONED FOR THE NEXT STEPS 32

33 NORFUND NEXT 10 YEARS: SCALE OUR ABILITY TO BE ADDITIONAL 100 BILLION NOK 20 BILLION NOK

34 BRIDGING THE GAP TO INSTITUTIONAL INVESTORS CATALYTIC ROLE 34

35 HISTORY: The new kid on the block MARKETS: Investing along a bumpy road STRATEGY: An active, strategic minority investor NORFUND: Next steps