These are the main conclusion of Document no. 3:13 (2006-2007) The Office of the Auditor General’s investigation of Norfund’s operation and management which was submitted to the Storting on 3 July 2007.
From the establishment of the company in 1997, the intention of the Storting has been to prioritise the world’s poorest countries. The investigation shows that Norfund has not placed sufficient focus on investments in and loans to projects in the least developed countries. At the end of 2006, total investments in the least developed countries amounted to only 24 per cent.
Of the total investments, 36 per cent have been made in Norway’s partner countries. As a whole, more than half of the investments have been made in countries that are neither among Norway’s partner countries nor among the least developed countries. The objective of making increased investments in sub-Saharan Africa has not been achieved, since Norfund’s investments in Africa do not constitute more than 17 per cent in total.
Nor have Norfund’s strategic investments through both its ownership in the equity fund management company Aureos Capital and its cooperation with SN Power (an investment company in the energy sector) focused on investments in the prioritised countries. Moreover, Aureos funds have to only a small extent contributed to attracting private investment capital.
The investigation shows that Norfund does have guidelines – for example for internal control and risk management – but that these guidelines have not been sufficiently implemented. This has also contributed to the company’s weak goal achievement.
In its response, the Ministry of Foreign Affairs has said that the investigation has provided valuable correctives and recommendations for the continuation and improvement of the company’s operations. The investigation has also given useful feedback on Norfund’s activities up to the present time, and it will form the basis of the Ministry’s efforts to further develop the management and control system for Norfund.
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