Finn Ivar Marum EVP - SME Fund and Agribusiness Investments

25 %

16 %

12 %7 %6 %

7 %

4 %3 %

20 %

Agribusiness

Manufacturing

Wholesale/ Trade

Financial Services

Health and social work

Communication

Education

Energy

Other

PE FUNDS WITH SME FOCUS

2

WHAT

• Investments in small and medium-sized enterprises (SMEs) via external fund managers

WHY

• Shortage of risk capital especially pronounced for SMEs

• Investing through funds enables outreach far beyond Norfund’s own capacity constraints

Africa

MNOK1 400

MNOK250

Latin America

MNOK400

Asia

COMMITTED

2 056 MNOK

FINANCED

632 SME investments

31.12.2017

FUND STRATEGY

3

AdditionalityRisk

Capital

Managing

Monitoring

Active

Inexperienced fund managers and/ornew fund establishments by Norfund

Sector based and geographical focused funds

Established Funds Managers with proved track record

INVESTMENTS IN 2017

4

AdditionalityRisk

Capital

Investments in 2017

Managing

Monitoring

Active

Nordic Horn of

Africa Fund

INITIATIVES IN 2018

5

AdditionalityRisk

Capital

Managing

Active

Monitoring

Commercially attractive risk/return

FOOD AND AGRIBUSINESS

COMMITTED

1 528 MNOK

ASSOCIATED SMALLHOLDERS

12 000 smallholder farmers

linked with portfolio companies

LOCAL SUPPLIERS

1 200 MNOK in local

purchases in 2017

26 direct

investments

6

Nairobi, Kenya

Maputo, Mozambique

Accra, Ghana

Norfund’s regional offices

WHAT

• Investments with partners in individual companies in Southern and Eastern Africa, particularly in agribusiness

WHY

• High development effects from startup and high-risk projects

• Attract expertise and technology to LDCs in Sub-Saharan Africa

INVESTMENT STRATEGY

7

Right Partners

▪ We seek competent industrial partners and a competent management team who share investment risk▪ We strive to align investors and management with a shared game plan and milestones outlining roles and

responsibilities of the investors, board and management▪ We seek shared core values and a long term partnership

Implement Institutional

Practices

▪ Find and retain quality management team▪ Institutionalised, customised reporting▪ Improved transparency, internal controls, and financial management systems▪ Better governance rights▪ Best practices ESG monitoring

Investment Themes

▪ Focus on fastest growing agribusiness sectors: including FMCG, transportation, storage, processing,manufacturing and retail sectors

▪ Leverage on demographic and socioeconomic changes: the rapid development of the African consumer class,improving standard of living, strong urbanization trends, growing local entrepreneurship and economic growth

▪ Introduce proven business models: look for managers and portfolio companies that seek to implement globalbest practices across the agribusiness value chain

▪ Import substitution: seek to focus on sectors and products that have unmet local demand (despite Africa’sagricultural resources and 75% of the population being involved in agriculture, Africa has been a net importerof food since the 1970s)

▪ Focus on infrastructure & value chain enhancement: lack of sufficient infrastructure and logistics systemsrepresents major obstacle for many African businesses leading to enormous inefficiencies in the value chain

VALUE CREATION THROUGH ACTIVE OWNERSHIP

8

Value Creation Process

8

Value Creation Model

WE ENGAGE WITH MANAGEMENT TO DEVELOP A JOINT GAME PLAN FOR

9

A game plan presents an outline of key actions throughout the investment cycle. It allowseffective and structure way of working by breaking down and executing goals step-by-step. Akey aspect of the game plan is to get alignment between the shareholders and management.

Creating a game plan enables investors and management to:

o Reflect over what initiatives should be prioritized and at what stage of the investment

o Create transparency and alignment between the owners and management

o Monitor progress and current state of the investment

A good game plan should include:

o A well thought out vision for the investment

o Realistic and measurable initiatives in prioritized sequence

o Responsibility and ownership of the initiatives

o Start and completion date for the initiatives

o Milestones to be achieved

Why Do We Need a Game Plan?

INVESTMENTS IN 2017

10

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Marginpar

Group

GROWTH PLATFORMS

11

nyamaworld

Beef

Tropical Fruits

Cut Flowers

Marginpar

Group