Norway boosts investment in South Africa amid global uncertainty

The government of Norway is increasing its development and climate finance in South Africa, a key diplomatic partner, as a hedge against global instability in trade, geopolitics, and the environment. Norway's minister of international development, Åsmund Grøver Aukrust, announced that the annual funding of Norfund, the Norwegian Investment Fund for Developing Countries, will be increased by 2.4-billion kroner to 5.6-billion kroner, approximately R9.85 billion. This move aims to support developing countries, including South Africa, in the face of growing global uncertainty.

Aukrust cited the ongoing conflict in Ukraine and the rise of trade protectionism and climate skepticism as reasons for Norway's increased commitment to supporting developing countries. He emphasized that Norway's top priority is to support Ukraine, while also recognizing the importance of strong friendships and partnerships across regions. Aukrust noted that Russia's invasion of Ukraine is a clear violation of international law and the UN Charter, and that it directly affects Norway's security due to its geographical proximity to Russia.

During his visit to South Africa, Aukrust toured companies and businesses that received funding or operational support from Norfund and Norwegian companies. He visited Langeberg Foods, a deciduous fruit business that received investment from Norfund, and Capac, a fruit-packing company that uses technology from Norwegian companies Tomra Systems and Yara International. Aukrust highlighted the importance of economic cooperation, investment, and trade between Norway and South Africa, with a focus on creating jobs in the South African economy.

Aukrust emphasized that Norway intends to use its official development assistance as a catalytic mobilization of investment, particularly in South Africa. He noted that Norway and South Africa have a long and historic relationship based on solidarity, dating back to the struggle for independence. Aukrust expressed his desire to see more economic cooperation, investment, and trade between the two countries, with a focus on creating jobs and promoting sustainable development.

One of the sites visited during Aukrust's tour was the Zandvliet citrus farm in Ashton, Western Cape, which used Norfund funding to implement a netting system, reducing water consumption. This investment is part of Norway's efforts to support sustainable development and climate change mitigation in South Africa. Aukrust highlighted that South Africa is one of Norway's most important partners on both development and climate issues.

A recent report by the Mission Possible Partnership's Global Project Tracker found that emerging markets, including South Africa, are attracting an increasing share of investment in clean industry. The report noted that emerging markets have secured $32 billion across 20 projects to date, with a further $2.6 trillion of investment potential in the pipeline. This trend suggests that South Africa and other emerging markets are well-positioned to benefit from the global transition to a low-carbon economy.

The report also highlighted that emerging markets are outpacing Europe in terms of policy progress, creating a new "industrial sunbelt" with abundant clean-energy potential. Norway's increased investment in South Africa is part of a broader effort to support sustainable development and climate change mitigation in emerging markets. As Aukrust noted, Norway's goal is to use its development assistance to catalyze investment and promote sustainable development in countries like South Africa.

Key points

• Norway to increase annual funding for Norfund by 2.4-billion kroner
• Increased investment aims to support developing countries, including South Africa, amid global uncertainty
• Norway and South Africa have a long and historic relationship based on solidarity, with a focus on economic cooperation and sustainable development