Regulatory Risk in Infrastructure, Norway to Cut Tariffs
Regulatory risk is a significant risk when investing in energy infrastructure. Policymakers can enact legislation, impacting the return on investment and increase liabilities. The Norwegian Ministry of Petroleum and Energy is proposing cutting tariffs to ship gas through its pipelines by 90%. This proposed reduction would apply to new contracts. Major areas of the Gassled system are booked for years. Cash flow implications will occur, especially in the long run.
It is nearly impossible to have proper due diligence in energy infrastructure when there will be future political change in regulatory or legislative regimes.
Public investors have spent billions buying stakes in Gassled over the past few years. [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]