Norwegian pension fund invests €200m in “dark green” infra projects
Norway’s largest pension company KLP Group, which has total assets of NOK 814bn (€80bn), has partnered with Macquarie Asset Management to develop a platform to invest in green infrastructure debt. The platform will target investments in debt assets across the solar power, wind power, hydropower, and sustainable energy storage sectors. While KLP will commit €200m (NOK 2bn) to these investments, a framework has been established to enable the platform to demonstrate that its investments contribute towards the achievement of international climate goals.
Aage Schaanning KLP’s CFO, said that the pension fund wanted to substantially increase its investments in green infrastructure, in the form of long-tenor debt. “We were, even after a thorough search, not able to find a solution of this type that was sufficiently green, so we had to develop it ourselves,” he said, adding that this is the first time KLP has made an investment of this kind.
Macquarie AM has helped KLP establish a “dark green” strategy to invest in long-term green loans, aligned with the EU Taxonomy for sustainable activities. Pointing out the Norwegian pension fund’s aim is to fulfil EU requirements while not impairing investment performance, Schaanning said that their approach invests in loans with very long tenors, a segment of the market that it is expensive for banks to hold on their books due to high capital charges.
KLP has been subsequently increasing its climate-friendly investments, investing NOK 6bn (€590m) every year. In 2020, the pension increased this to NOK 8.8bn (€870m), including the dark green strategy.