Danish pension fund invests DKK 4bn in solar parks

On the 12/03/20 at 7:52AM


Tuba Raqshan

Terming it as a ‘historic’ investment, Industriens Pension teamed up with Danish energy company Better Energy to invest DKK 4bn (€540m) in new solar parks in Denmark and Poland.

The agreement, termed as the largest Danish solar cell investment ever, will boost the spread of solar parks that are operated without support. This is a 50-50 partnership between Industriens Pension and Better Energy on the ownership of the completed parks, which will be operated by the energy firm.

The first five photovoltaic parks covered by the agreement have already been put into operation, with the majority of these infrastructures expected to be put into operations during 2021 and 2022. Almost 75% of these solar parks will be constructed in Denmark, while the others are expected to be in Poland. The total capacity of the solar parks is expected to be approximately 1GW, corresponding to an annual reduction of over 350,000 tonnes of CO2.

Laila Mortensen, CEO of Industriens Pension, expects that the investment will ensure a solid long-term return for the members, while contributing to faster scaling of the green transition. The investment is expected to total DKK 1.5bn (€200m) in equities from the parties, supplemented with long-term construction financing at the solar parks, typically through mortgages. The total investment (with equity and construction financing) is expected to reach DKK 4bn (€540m).

This is the first time where the Danish pension money is being used to support a massive scaling up of state-subsidised green energy in Denmark, explained Rasmus Lildholdt Kjær, CEO of Better Energy. “The next chapter in the green transition will be precisely about renewable energy production being rolled out and accelerated without state support, and at the same time having broad popular co-ownership. That is exactly what we ensure with this agreement,” added Kjær.