NORSAD CAPITAL: Impact Through Partnership

Back in 1990, long before the word ‘impact’ became commonplace across investment circles, a group of governments from southern Africa and the Nordic region came together to answer a big question: how do we strengthen the African private sector and expand access to growth capital for companies that can drive real change?

The result was the Norsad Fund and Norsad Agency, a pioneering joint initiative between the governments of Norway, Sweden, Denmark, and Finland, and 11 southern African nations (SADC) including Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Tanzania, Zambia and Zimbabwe. “In 2012, the Norsad structure was collapsed into an investment holding company named Norsad Finance and later Norsad Capital domiciled in Botswana with the mandate continuing to be investment on a southern African scale.”

With $250 million in assets under management, Norsad is firmly positioned in the private credit space, investing across the region with a clear and constant mandate: finance African growth while delivering measurable, sustainable impact.

“We take pride in not only the fact that we achieve financial returns but also in the way we unlock the impact thesis. We have a trilemma that exists between the financial return we generate, the impact we create, and the risks we take. The whole challenge is managing that triangle and remaining balanced,” Chief Investment Officer Nathaniel Nyika tells Enterprise Africa. 

Today, Norsad Capital employs around 30 professionals, working from offices in Johannesburg and Gaborone, leveraging a wider network of on-the-ground partners through the Norsad Alliance. The model is not just about deploying capital; it’s about shaping the market through collaboration and long-term partnership. 

“Through our evolution, we have become an impact investor. We look at creating impact that is developmental,” says Nyika. “We define the impact in various ways. Our specific impact measure is viewed through four lenses – financial inclusion, gender equality, climate action, and sustainable livelihoods.” 

MARKET SUPPORT 

This approach is more important than ever as sub-Saharan Africa grapples with volatility and transformation. From the lingering effects of COVID-19 to geopolitical shocks like the Russia-Ukraine conflict, and US monetary tightening, businesses across the continent have faced immense challenges. 

“We refer to the whole situation as a poly-crisis,” says Nyika. “Sub-Saharan Africa is not a single market, it is made up of 49 countries, each with different legal, political, and monetary environments. When you cross from the DRC into Angola, it is a very different picture.” 

Yet amid these challenges lie massive opportunities. Africa’s demographic advantage – a young, growing population with increasing entrepreneurial drive – makes it ripe for innovation and investment. Norsad Capital positions itself as a strategic, catalytic partner to mid-market businesses that have the ambition to scale but lack traditional access to finance. 

“We offer structured debt solutions to mid-market companies across the region. These companies have an EBITDA of $1.5 million to $2 million and they sometimes struggle to raise finance from their local banks,” explains Nyika. “We are complementary to banks; we are not there to substitute banks.” 

The firm’s model of providing structured debt allows it to bridge the often significant gap between equity and bank senior debt. “Sometimes we refer to it as catalytic funding because it can spur projects to get going. Many projects are bankable but there is a gap between debt and equity which requires bridging.” 

STRATEGIC PRIORITIES 

Central to Norsad’s investment philosophy is a focus on sectors that not only offer financial returns but align with broader development goals. Climate action, for example, is an increasingly important priority. 

“Our investments must consider how they reduce carbon in the atmosphere and encourage more usage of renewable energy,” says Nyika. 

Financial inclusion is another pillar of Norsad’s strategy. With a large segment of Africa’s population underserved by traditional banks, enabling access to finance is crucial for economic empowerment. 

“In Africa, we have a big segment of underserved and underbanked people and we have to allow people to access financial products and participate in the market – how can our investments assist?” Nyika asks.

Technology adoption underpins many of these efforts. From fintech platforms transforming payments and lending, to agri-tech solutions improving smallholder productivity, Norsad is increasingly supporting companies that leverage innovation to reduce costs and scale impact.

“The companies we back are often using tech to reduce operating costs and reach markets more efficiently,” Nyika explains. “That gives them a competitive edge and helps unlock growth in difficult markets.” 

CASE STUDIES

One of the standout success stories in Norsad’s portfolio is African Milling Ltd in Zambia, a company that makes maize and wheat products. After partnering with Norsad, the business grew to become one of the largest producer by installed capacity in Zambia, now exporting to neighbouring DRC and diversifying into bakery products. 

“We financed the installation of a new milling plant from Switzerland and we built large silos which are some of the tallest structures in Zambia,” says Nyika. “The impact created was significant, especially the indirect such as the growing procurement of grain from small holders.” 

Another example comes from eSwatini, where Norsad backed eSwatini Oil Mills in constructing a soya extraction plant to complement its edible oil refining operation.

“That went into production last year and is performing very well. There was significant job creation during construction and now in operation,” says Nyika. “Now there are talks about allowing farmers to grow soya as a strategic crop for the country.”

Housing has also been a major impact area. In Namibia, the Ongos Valley development near Windhoek aims to address the country’s acute housing shortage by building 28,000 homes over 15 years. Norsad played a catalytic role in financing the initial housing pockets. 

“As Norsad, we helped with the build of the first section, around 500 houses, and that catalysed the big banks to come with their pockets. Now, there are 1000 houses and more are planned.” 

In Uganda, the firm backed Watu Credit, a business offering finance for boda boda motorcycles on a hire purchase basis. The result? Thousands of jobs created, transport infrastructure improved, and financial inclusion expanded. 

“Enabling that company to grow has enabled more sustainable livelihoods beyond those employed by the business,” says Nyika. “There are so many examples of our work.” 

ENDURING OPPORTUNITY 

Looking ahead, Nyika sees only increasing relevance for Norsad’s model. Africa is urbanising rapidly, shifting from agrarian to manufacturing and services-led economies. Migration to industrialised cities is creating new consumption patterns, which in turn open up opportunities across food production, housing, logistics, and finance. 

“We are seeing a number of companies starting to emerge. Traditionally, global companies came into Africa and developed products that then take off. But now, we are seeing local champions develop solutions that is more tailored for the local market because the entrepreneur has grown up knowing the challenges,” he says.

Technological innovation is also accelerating the change, helping local businesses cut costs and scale faster. Meanwhile, frameworks like the African Continental Free Trade Area (AfCFTA) and regional economic communities are starting to ease cross-border movement and trade. 

“That means single entry country but multiple markets,” highlights Nyika. “The opportunities are without doubt still there. The growth companies are still there. But it is a transformative stage and we are looking at companies that are using tech to reduce operating costs.” 

The key, says Nyika, is remaining agile and rooted in impact. Africa’s path to prosperity is not linear, and development requires long-term commitment from partners who are willing to work within the unique dynamics of each country. 

“We have youth that is coming into the productive economy, and plenty of them. A lot are now becoming entrepreneurs to create jobs for themselves and others. As soon as they take off they become bankable, and as soon as they are bankable more and more of the youth adopt them very quickly – M-PESA is the easy example.”

For Norsad Capital, the mission remains clear: provide catalytic finance that helps transform businesses, economies, and lives. As it enters its fourth decade, the firm is more convinced than ever that the future of investment lies not just in financial return, but in shared prosperity. 

“Does our investment create jobs? Does it encourage entrepreneurs, is it through a women-led company? In Africa, we have a big segment of underserved and underbanked people and we have to allow people to access financial products and participate in the market – how can our investments assist?” says Nyika. 

This is investment with purpose. And in Africa, the potential is boundless.