Impact Fund Denmark has made an additional investment of DKK 40 million in the Nordic Horn of Africa Opportunities Fund (NHAOF). The investment will increase access to capital for small and medium-sized enterprises in Somalia. This is crucial in a country that very few investors dare to enter and where the lack of long-term financing is holding back growth, investment and job creation.
Somalia is a country hit hard by both conflict and climate change. Droughts, floods and water shortages repeatedly affect the population, making it difficult for ordinary Somalis and Somali businesses to achieve the necessary stability.
In 2025, the UN estimated that nearly half of the population was affected by drought, flooding and displacement. In this situation, investments in local businesses are not only important for growth, but also to make local communities better able to cope with crises. In addition, the situation in the Strait of Hormuz is expected to put significant additional pressure on the economy through higher energy and import prices.
The investment will focus more on green growth and climate resilience in Somalia. This includes companies within renewable energy, sustainable agriculture and food production as well as water supply, fishing and local processing in Somalia.
An example is the company Afi Water Factory, which with support from the fund has expanded the production of clean drinking water and at the same time developed a more sustainable operation with significant use of solar energy.
NHAOF is managed by Shuraako, a locally anchored asset manager working with a financing model adapted to the market. They know Somalia and understand the needs of businesses. This is important in an economy where many companies otherwise only have access to very short-term financing. With funding from NHAOF, more companies will have the opportunity to invest and develop their business and create more jobs.
This is an example of how capital can be used responsibly in a very fragile market. This requires local insight, patience and a model built for the reality in which the companies operate.
The investment in NHAOF has been made together with Denmark’s embassy to Somalia. Impact Fund Denmark also manages a capital contribution on behalf of the European Commission.
External Communications Director
Thøger Kirk
+45 53 76 08 05
