Norway's sovereign wealth fund opens up to unlisted renewable energy

8th April 2019


Web norway windfarm shutterstock 549469963 1

Related Topics

Related tags

  • Energy ,
  • Central government ,
  • Fossil fuels ,
  • Renewable ,
  • Investment

Author

IEMA

Norway's $1trn (£0.8trn) sovereign wealth fund will now be able to invest in unlisted renewable energy projects, the country's finance minister announced last Friday.

The Government Pension Fund Global will only make the investments under 'environment-related mandates', with the upper limit for these doubling from $7bn to $14bn.

And an additional cap of 2% of the fund's value has been proposed for unlisted renewable energy infrastructure investments in order to limit risks.

Finance minister, Siv Jensen, said: “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.“

These will form part of Norges Bank's active management, which has stated that it will first consider investments in developed markets, and in projects that are relatively low risk.

“The proposed regulation will enable Norges Bank to adopt a gradual approach in a relatively small market and to invest in a cost-effective manner,“ Jensen continued.

“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.“

This comes after a report from the World Economic Forum (WEF) revealed that just 0.2% of sovereign wealth funds' assets are currently invested in green or renewable energy.

It warned that more than a dozen fossil fuel-rich economies risk becoming “stranded“ as the world shifts to sustainable energy, and that sovereign wealth funds will be crucial to addressing this.

“To protect their economic futures, countries whose economies rely on fossil fuels need to prepare now for the impending global shift,“ WEF senior director, Maha Eltobgy, said.

“Nations that have diligently built large sovereign wealth funds to manage the economic challenges of the 'age of oil' must now consider how to use this vast wealth to prepare for the age of green energy.“

Image credit: Shutterstock

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

UK off track for net zero by 2030, CCC warns

Only a third of the emission reductions required for the UK to achieve net zero by 2030 are covered by credible plans, the Climate Change Committee (CCC) has warned today.

18th July 2024

Read more

Three in five British adults want more public involvement in the planning system, which could be at odds with Labour’s plans to boost economic growth, IEMA research has found.

3rd July 2024

Read more

Ahead of the UK general election next month, IEMA has analysed the Labour, Conservative, Liberal Democrat, and Green Party manifestos in relation to the sustainability agenda.

19th June 2024

Read more

Disinformation about the impossibility of averting the climate crisis is part of an alarming turn in denialist tactics, writes David Burrows

6th June 2024

Read more

Rivers and waterways across England and Wales are increasingly polluted by sewage spills. What is causing the crisis and what is being done to tackle it? Huw Morris reports

31st May 2024

Read more

IEMA submits response to the Future Homes Standard consultation

31st May 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close