Norfund, part of the Norwegian government, with about Euro 635 million under management as of the end of 2008, is created to invest in the least-developed countries in firms and projects using an entrepreneurial approach that incorporates ESG related factors.
Idea: in most of these countries corruption is a big problem at higher government levels. If one would opt for a standard investment approach with money flowing via these institutions, the bulk of funds would not reach those who need it.
By going for direct commercial investments instead, Norway takes of course more risk (since it is now faced with the corrupt layers of government when unedertaking entrepreneurial activities in those countries), but it seems as if the net effect is preferable compared to the alternative, indirect approach.
LMG Emerge supports this type of approach, which is also directly in line with ideas presented by Zambian economist Dambisa Moyo who in her book 'Dead Aid' also prefers direct, entrepreneurial support and initiatives over traditional development aid.