Enterprise grant scheme contributes to job creation and sustainable development in low-income countries

The scheme is very popular among businesses that want to invest in developing countries, partly because Norad makes a major contribution to mitigating the investment risk. Norad provides grants for feasibility studies, training and local infrastructure, as well as for ICT and renewable energy, including pilot projects.

‘The aim is to increase the export of goods and services, improve access to reliable sustainable energy, reduce emissions from the energy sector in developing countries and – not least – to create jobs,’ says Kim Kristmoen, Acting Assistant Director, Section for Private Sector Development.

Thousands of jobs

In this round, Norad received 113 applications worth a total of just over NOK 1.1 billion. In other words, competition has been fierce, and there are strict requirements for the projects that can receive support. Applicants must document that they have both the financial and administrative capacity to realise the main investment associated with the grant application.

‘Provided that the projects we support are realised, Norad’s contribution of NOK 40 million will directly contribute to creating more than 2000 permanent jobs. The support from Norad will also trigger private investments to the tune of NOK 450 million. This amount will increase as the scale of the projects escalates, and we envisage a potential to create in excess of 10 000 more jobs,’ adds Kristmoen.

Paper recycling and mobile banking

A paper recycling project in Ethiopia is one of the projects that received support in this round. The goal of the project is to increase the capacity for collecting paper for recycling in Ethiopia by 500%, and thereby create 500 permanent jobs.

Another project involves efforts to facilitate a good-quality freshwater aquaculture facility for tilapia fish in Ghana. The project will initially create 190 permanent jobs, and a further 1400 when the facility has reached full capacity.

Further development of an app that enables mobile banking in Africa is also one of the projects receiving Norad support. The project will reach over 700 000 people in Africa.

These three projects have each been awarded around NOK 2 million.

‘These are good examples of how the business community, with a little help in the form of development support, can create large numbers of jobs and mobilise significant sums of private capital. The scheme shows just how much can be achieved with relatively little money, and not least that the business community is ready and willing to invest in low-income countries, often in large amounts. All they require is a bit of help with risk sharing and risk reduction,’ concludes Kristmoen.

Helping to achieve the SDGs

Kristmoen emphasises how projects in receipt of Norad support can have a major impact on society. Two of the energy projects that have been approved for support will, for example, be able to supply over 35 000 people with stable, renewable electricity outside the grid network.

‘This type of energy supply also has a really positive effect on business development, both locally and regionally, and contributes to the achievement of the Sustainable Development Goals (SDGs),’ Kim Kristmoen points out.

All of the projects contribute in their own way to the efforts to reach the SDGs by 2030, either through increasing local recycling capacity and reducing waste in the cities, or through increasing food production and exports of fish from new regions, thereby facilitating sustainable food production. Or the projects may involve giving the population access to modern financial services, which enables more people to have financing opportunities that they would not otherwise have through commercial banks.

The applications are assessed by a committee based on clear criteria on how well they contribute to the aims of the scheme. Norad’s specialist departments, Innovation Norway and embassies have provided the committee with expert input.