Published on April 6, 2019 |
6. April 2019 by Steve Hanley
On April 5, the Norwegian government announced that its sovereignty fund will be allowed to double its investment in unlisted renewable energy ventures to $ 14 billion. In a statement, it said "it is now permissible for the Government Pension Fund Global to be invested in unlisted renewable energy infrastructure. The investments will only be made within the framework of the special environmental related mandates."
The official announcement continued: "The renewable energy market is growing fast. A large part of the investment opportunities for renewable energy are in the unlisted market, especially in unlisted infrastructure projects. of significant investments going forward means that this market is of interest to institutional investors such as the Government Pension Fund Global. "
At the time of the announcement, Norwegian Finance Minister Siv Jensen said:" We do not stipulate that the Fund shall is esterified in unlisted renewable energy infrastructure, but allows Norges Bank to make such investments if it is considered profitable, "according to OilPrice.com.
Unlisted projects account for more than two-thirds of the entire market for renewable infrastructure, worth $ trillion, according to a report in The Guardian. Sverre Thornes, CEO of the Norwegian pension fund KLP, said: "This move will most likely expand the market further and faster. Our total renewable infrastructure return was around 11% last year. Clean energy is what will move us away from it dangerous and destructive path we are currently on. "
The news comes just a few weeks after the sovereign investment fund decided to end investments in oil and gas research operations. Climate presidents can celebrate both announcements, but the Norwegian government says that the moves are strict based on sound financial planning and are not inspired by political or ideological considerations.
Also, the Norwegian government on Friday said that the sovereign securities fund would dispose of more coal companies, a process it began in 2015 when it eliminated nearly $ 7 billion in investments in coal producers from its holdings.
"Unlisted renewable energy is a growth industry," said Tom Sanzillo at IEEFA. "Investments from the Norwegian Fund now give it the opportunity to exploit this growth and use the resources to develop the market for decades. This is a strong step for the Fund's and the planet's health."
Per Kristian Sbertoli, at the Norwegian climate-specific climate Zero, tells The Guardian announcement represents a "historic breakthrough." Although the plot cannot be driven by environmental concerns. "These measures from the world's largest sovereign mutual funds are being noticed and helping to reduce the cost of renewable energy, while increasing the global shift away from coal." Globally, nearly 1,000 institutional investors with more than $ 6 trillion in assets have joined fossil fuel sales.
Mark Lewis from BNP Paribas Asset Management sums it up nicely. "Renewable energy is the new rust for the oil and gas industry, and if the industry does not adapt to this new reality, they will corrode future profits, just as rust corrodes oil rigs."