Norway’s Sovereign Wealth Fund Can Now Invest in Unlisted Renewable Energy Infrastructure
Posted on 04/05/2019
Norway’s finance ministry revealed that Norway Government Pension Fund Global can invest in unlisted renewable energy infrastructure under the dedicated environmental mandates. In a gradual investment approach, such renewable investments will be subject to the same profitability and transparency requirements as the other investments of the fund, according to the finance ministry.
The wealth fund plans to proceed with caution and start up by analyzing investments in developed markets and projects with relatively low operational and market risk.
According to the press release from finance ministry, “The investments shall be made within the scope of the special environment-related mandates only. The upper limit on such investments will be doubled, from 60 billion NOK to 120 billion NOK. Such investments will form part of the Norges Bank’s active management, and will draw on the scope for deviations from the benchmark index, which is to remain unchanged. In addition, the introduction of a separate upper cap on unlisted renewable energy infrastructure investments, at 2 percent of the Fund, is proposed in order to limit risk.”
The finance minister in the statement added, “Allowing for unlisted renewable energy infrastructure is not a climate policy measure, but is a part of the investment strategy for the Fund. These investments shall be subject to the same profitability and transparency requirements as the other investments of the Fund. We are not stipulating that the Fund shall be invested in unlisted renewable energy infrastructure, but are enabling Norges Bank to make such investments if deemed profitable, says the Minister of Finance.”
