Norway doubles its investment in renewable energy with a sovereign fund

April 6, 2019 by Steve Hanley

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The Norwegian government announced on April 5 that its sovereign fund would be allowed to double its investment in unlisted renewable energy projects to $ 14 billion. In a statement, he said that it "now allows the Government Fund Fund Government to be invested in unlisted renewable energy infrastructure." Investments must be made under special mandates related to to the environment. "

The official announcement continued: "The renewable energy market is growing strongly. Much of the renewable energy investment opportunity is in the unlisted market, particularly in unlisted infrastructure projects. Significant future investment expectations mean that this market is of interest to institutional investors such as the Global Government Pension Fund. "

Siv Jensen, Norwegian Minister of Finance, said at the time of the announcement: "We do not stipulate that the Fund will be invested in unlisted renewable energy infrastructure, but we allow Norges Bank to make such investments. 'they are considered profitable' OilPrice.com.

Unlisted projects account for more than two-thirds of the entire renewable energy infrastructure market, worth billions of dollars, according to a report by The Guardian. Sverre Thornes, CEO of the Norwegian pension fund KLP, said: "This decision will probably allow the market to develop further and faster. The overall rate of return on our renewable energy infrastructure was about 11% last year. Clean energy is what will take us away from the dangerous and devastating path we are currently facing. "

The news comes just weeks after the sovereign fund decided to stop investing in oil and gas exploration. Climate advocates can celebrate these two announcements, but the Norwegian government says these measures are strictly based on sound financial planning and are not inspired by political or ideological considerations.

Also on Friday, the Norwegian government announced that the sovereign fund would disengage from a larger number of coal companies, a process started in 2015 when it removed from its stocks nearly $ 7 billion worth of oil. investments in coal producers.

"Unlisted renewable energies are a growing sector," said Tom Sanzillo at IEEFA. "The Norwegian fund's investments now allow it to capitalize on this growth and use its resources to develop the market for decades. This is a decisive step for the health of the fund and the planet. "

Per Kristian Sbertoli, reflecting on the Norwegian climate Zero, tells The Guardian This announcement is a "historic breakthrough". Even if the action does not respond to environmental concerns, "these actions of the largest sovereign wealth fund in the world are noticed and help reduce the cost of renewable energy, while accelerating the global movement of coal. Worldwide, nearly 1,000 institutional investors representing more than $ 6 trillion in badets have joined the disinvestment movement in fossil fuels.

Mark Lewis of BNP Paribas Asset Management sums up the situation. "Renewable energies are the new rust for the oil and gas industry and if the industry does not adapt to this new reality, it will corrode its future profits, just as rust corrodes oil rigs."

Keywords: Transfer of fossil fuels, fossil fuels, sovereign wealth fund for Norway, investment in renewable energies