Norsad Capital

Norsad is a financial organisation that was initially established in 1990 as a multilateral agency in Lusaka, Zambia, through a partnership between the Nordic and Southern African Development Community (SADC) governments.

It was transformed into a limited liability company called Norsad Finance in Botswana in 2011 and rebranded to Norsad Capital in 2022, aiming to scale and deepen its impact in Africa.

Norsad aims to build a better Africa by supporting the growth of profitable African companies through tailored debt finance solutions that enable them to make a substantial and ongoing social impact.

Norsad's values and purpose: Maximum impact on the African continent

Norsad's values are centred on being passionate, and authentic, seeking growth, cultivating adaptability, and embracing collaboration. They aspire to positively impact the lives of 100 million Africans by 2030.

To achieve their purpose, they offer tailor-made debt finance solutions to support the growth of African companies, thereby enabling them to provide services and employment that will have a significant and lasting social impact on the African continent.

Since its inception, Norsad has achieved various milestones, including an operating surplus of USD 1.5 million in 2004, increasing its capital base to USD 84 million, and celebrating its 10th anniversary in 2000.

Norsad is committed to positively impacting its communities and the environment by keeping it real with humility and high ethical standards, actively seeking to improve and learn from others' experiences, being innovative in thinking and execution, and embracing diversity and partnerships.

Private credit solutions for African mid-market companies

Norsad Capital is a financial institution that specialises in offering private credit options to medium-sized companies operating in Africa, to promote growth and development on the continent.

They stand out as a company with a deep-rooted history of investing in Africa and a team of diverse African professionals who can make flexible investment decisions quickly. They offer structured debt financing solutions to African businesses that can produce positive social and environmental impacts alongside financial returns. One of the private debt solutions they offer is mezzanine financing, which allows companies to pursue strategic long-term opportunities. They provide funding solutions that usually last for 4 to 7 years, which are crucial for sustainable development, long-term planning, and faster growth.

Diverse and experienced investment professionals at Norsad capital

The senior team and investment professionals at this company are diverse, with 7 nationalities and over 150 years of combined investment experience, ranging from banking to private equity. The team includes investment analysts, portfolio managers, finance directors, and more

Norsad Capital offers customised financing solutions to mid-market companies for their growth and development, with a holding period ranging from 4 to 7 years.

They collaborate with entrepreneurs, management teams, and sponsors to design financing options that align with their client's strategic objectives. The company provides a suite of debt financing products, such as senior debt, stretch senior, unitranche, second lien, and mezzanine finance, tailored to each client's capital structure and business requirements.

Types of debt financing for companies

Senior debt is a company's highest priority debt that must be repaid first during bankruptcy. Second-lien debt is secured debt that ranks equally for payment with senior debt and shares the same security package.

Unitranche finance combines senior and subordinate debts into one loan, enabling medium-sized companies to access financing that would be impossible to get from a bank. Mezzanine finance is a hybrid form of funding that combines features of debt and equity, used in acquisitions and buyouts or to minimise dilution of equity.

Norsad Capital's investment criteria

Norsad Capital is constantly looking for USD5 million+ financing opportunities and follows a rigorous credit-centric and disciplined investment process in identifying target partners.
Companies they finance typically exhibit predictable stable or growing cash flows, revenues between USD5 million to USD50 million, EBITDA of over USD1.5 million, a dedicated and experienced management team, accountability and transparency in audited financial statements, shareholder alignment, commitment to good corporate governance practices, and high social and environmental sustainability standards.

Norsad Capital's exclusion list

Norsad Capital has established a list of prohibited activities, which is referred to as the "exclusion list." This list is based on the International Finance Corporation's (IFC) list of activities that are not eligible for financing. Norsad's exclusion list includes several activities such as the production or trading of illegal products, weapons and munitions, tobacco, and gambling, among others.

Moreover, financial intermediaries must also apply a set of exclusions, such as commercial logging operations in primary tropical moist forests and the production or trade of wood or other forestry products that are not from sustainably managed forests.

For microfinance activities, Norsad excludes harmful or exploitative forms of forced labour or child labour, significant amounts of hazardous chemicals, and activities that affect the lands owned by indigenous peoples. Similarly, for trade finance investments, harmful or exploitative forms of forced or child labour are also excluded.