Daily Management Review

Norwegian Sovereign Wealth Fund Can’t Find Suitable Energy Investment Project


The fund continues to be on the look out for suitable projects to carry on with its investment plans.

The largest wealth fund in the world is of Norway’s “$1.1 trillion sovereign wealth fund” which is currently struggling to find “suitable unlisted renewable- energy projects” to direct its investments as their stakes have caused “strong competition” while their numbers have grown scarce, revealed the new chief executive of the wealth fund.
Until recently, the fund had clearance to only invest in “stocks, bonds and real estate” and the said investment road is a fairly new one for it. As the new chief executive, Nicolai Tangen stated:
“In our experience so far, there are many investors looking for these investments and pricing is thus not always as attractive for us”.
“These investments are subject to the same risk and return requirements as the (fund’s) other investments. In the near term, finding projects that meet these requirements may be demanding.”
In March 2020, the fund had informed about its plans of investing nearly “100 billion crowns” in “unlisted renewable projects” between the year of “2020 and 2020”. The projects could include “wind parks and solar farms” although the first priority for the fund will remain “North America and Europe”. Even though, not many investment friendly projects are out there, the chief executive informed that the fund stands by its earlier strategy. In Tangen’s words:
“They are few and they are big. It is difficult to know when they are coming...There is a lot of competition for these projects”.
The C.E.O also informed that the fund continues to be on the look out for suitable projects to carry on with its investment plans. When Tangen was asked if the fund considered investing in emerging markets instead, he replied:
“It is important to say that we have not at all given up on making those investments in North America and Europe. We are working hard on this to make it happen.”
Mie Holstad, chief real assets officer, is heading a five-members’ team responsible to carry out these investments. While Reuters added:
“The fund was allowed to invest in the assets after extensive discussions among Norwegian politicians about the suitability of the fund to invest in unlisted assets”.