Norwegian cleantech funding ecosystem

Note: This article is based on the work I did in 2013–14. Therefore some conclusions and observations may not apply today.

As is the trend in other NORDIC countries the venture fund raise did experience a dip down to EUR 14.3 million in 2009, in Norway, from being over 400 million in the previous year. It has been rising gradually since then. In 2012 the total funds raised were EUR 207.8 million with government raising the massive share of 97.5% of the total amount.

Total funds raised & proportion of government contribution in venture fund raining in Norway (in Euro’000)

Source: European Private Equity and Venture Capital Association, 2013

The highest amount of seed investments as a percentage of total venture investments was in 2007 and dipped down an insignificant level in 2012. Although the total investments made in energy & environment companies has been consistently more than 30%. In 2011 the total such investments made in energy/environment companies stood at 52.9%.

Total investment in Norwegian start-up’s by different venture stages (in Euro’000)

Source: European Private Equity and Venture Capital Association, 2013

Percentage of venture investments in Norwegian energy & environment start-up’s

Source: European Private Equity and Venture Capital Association, 2013

The cleantech industry is considered a medium-sized sector in Norwegian economy. In 2010 the industry achieved a total turnover of NOK 192 billion, while employing more than 38000 people in 2011. Sub-sectors like hydropower, power distribution and trading and waste management, treatment and recycling employ most people.

The Norwegian environmental policy (2004–05) covers various aspects of environment including noise pollution, climate change, biodiversity etc. and lays down ambitious targets for the policy. In order to promote renewable energy, the government has a tradable green certificate scheme in conjunction with Sweden and also a funding scheme for renewable heat and electricity. Despite being an oil and energy producing nation Norway has announced plans to go carbon neutral by 2050 and to change this deadline to 2030 lest significant number of other countries also take major obligations in this regard. The Norwegian parliament in 2008 undertook a Climate Agreement, that has resulted in tripling of public funding into R&D from 2007–09.

With regard to venture fund raising governmental share in the same hasn’t shown much consistency. In some years the contribution was more than 90% while in some it was less than 5%. It is therefore difficult to understand the impact of government’s venture funding in the sector. Although the share of investments in energy & environment related sectors have been above 30% since 2007. It would be an interesting question to explore that whether this venture activity is a result of early stage R&D public funding or government’s VC co-investment?

Financing cleantech innovations in Norway

Energy & environment is an important area of Norway’s innovation policy. A strategy for environmental technologies announced by the government in 2011 intends to develop environmental technologies by supporting commercialization & demonstration, R&D, public & private procurement, networking and regulations. Energi21, Norway’s national strategy for the energy sector is an effort by the government to “boost value creation, facilitate energy restructuring with the development of new technology and cultivate internationally competitive expertise”. To boost innovations through innovative demand side instruments the government wants public sector to lead the way in buying environmentally & socially acceptable products and services. This was highlighted in the Environmental and Social Responsibility in Public Procurement Action Plan. The following figure illustrates agencies active in the Norwegian cleantech innovation system.

Research and innovation system in Norway

Source: (Sonnenschein & Saraf, 2013)

Innovation Norway supports innovative development of Norwegian enterprises to enhance their domestic and international competitiveness through financial and business support. They provide advisory, promotional and network services and promote industry-academia interactions. In some cases enterprise support (loans or grants) may come from other organisation like the Research Council of Norway and Enova. The organisation is not entirely focused on cleantech and uses the following instruments.

  • Grants. Accessible for (mainly) SMEs in all sectors.

Some programs of Innovation Norway that are relevant to cleantech are:

  • The Environmental Technology Scheme is a grant scheme that targets cleantech companies in the late start-up phase through co-financing. The aid intensity ranges from 25% for large enterprises to 45% for small ones. A 15% bonus can be obtained if the project is carried out together with additional private companies. In 2012 public funds worth EUR 33 million were allocated to the program.

Investinor is a government owned Investment Company also funded by the Norwegian government. They invest in later expansion stages of a venture aiding its international growth. It is a ever-green fund where the earnings are invested back into the fund and co-investment is a preferred mode of investment. Investinor takes minority stakes (<50%) in the portfolio companies and focus on the following sectors; ICT, oil and gas, the maritime industry, Aquaculture, biotech, cleantech, travel and tourism. In cleantech they have a total of 4 companies in their portfolio currently with NOK 281 million invested in them. In 2012 the government mandate of Investinor was slightly modified in order to give it more freedom in prioritizing sectors. This has led to shift away from cleantech as the old mandate earmarked certain amounts for sectors like maritime and cleantech.

The Research Council of Norway carries out research in different areas including climate change and environment. Out of its four such research divisions, the Division for Energy, Resources and the Environment is responsible for research and innovation targeting national and global challenges associated with the energy, petroleum, climate, polar, environmental and marine resources sectors. Through this division they conduct activities pertaining to policy development & design, strategy making and planning pertaining to resource management. In 2012, The Research Council of Norway’s total budget amounts to NOK 7433 million. In the area of energy R&D there are currently three relevant programmes:

  • ENERGIX is an applied energy research programme with a budget of EUR 45 million per year aim restructuring of the Norwegian energy system. In the first funding round in 2013, 25 projects have been awarded funding.

In addition the Council also runs other schemes for R&D commercialization:

  • User-driven Research based Innovation (BIA): BIA aims at crowding-in industrial R&D funding to increase the total level of R&D in Norway. In 2013 the programme had a budget of NOK 400 million for the first application round

Enova is a government owned energy fund owned by Ministry of Petroleum & Energy, which was established in 2001 for driving environmentally friendly production & consumption of energy including renewable energy production. The enterprise is financed via funds allocated from the Energy Fund which in turn is funded via an additional charge to electricity bills.

In addition, the Energy Fund is also allocated proceeds from “The “Green Fund for Climate, Renewable Energy and Energy Efficiency Measures”. The Green Fund’s capital in 2013 was NOK 35 billion, with NOK 5 billion to be added in 2014 and 2015. In 2013, Enova supported projects with a total energy result of 1.4 TWh, distributed over energy efficiency measures, conversion and increased utilization of renewable energy.

One of the most relevant scheme at Enova is Programme for the Introduction of New Energy Technology that supports concrete, physical installations.

Transnova provides grants and business support for pilot and demonstration projects concerning future-oriented sustainable mobility solutions. For 2013 Transnovas budget was EUR 87.2 million (~EUR 11.75 million). The main support instrument is competitive grant programmes to projects that are between R&D late phase and market introduction.


Norwegian governments’ interventions in cleantech are focus on all the phases of innovation, and thus avoid gaps and discontinuities. Despite of this, there is still a concern with respect to magnitude of interventions as funding from public sources may not be sufficient for achieving required change. Despite this Norway has developed an ecosystem, comparing other NORDIC countries, comprising institutions and instruments that are streamlined for better support and impact.


Association, E. P. E. a. V. C. (2013). Pan-European private equity and venture capital activity. Retrieved 15 March, 2014, from

Saraf, S. (2014). What should a public venture capital fund intend? A study on Denmark, Finland, Norway & Sweden. Lund University, Sweden.

Sonnenschein, J., & Saraf, S. (2013). Public cleantech financing in Denmark, Finland and Norway. Lund, Sweden: International Institute for Industrial Environmental Economics (IIIEE).



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Saurabh Saraf

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