Norway’s $1.3tn oil fund has made its first investment in renewable infrastructure, shrugging off concern about the recent prices paid for wind power projects, as its chief executive said he wanted to “tune up” returns at the world’s largest sovereign wealth fund.
The oil fund on Wednesday said it would pay€1.4bn for a 50 percent stake in a Dutch offshore wind farm owned by Orsted, the Danish renewable energy giant that will remain the operator of the project.
Under its mandate from Norway’s parliament, the fund can invest up to NKr120bn ($14.2bn) in renewable infrastructure. It is seeking to become one of the world’s biggest such investors as it diversifies its portfolio away from equities, bonds and property.
“We think we have a competitive advantage in that we’re a large fund that can write a large cheque . . . This is an area where we see a lot of opportunities going forward. For the fund, we see the diversification it can give us,” Mie Holstad, chief real assets officer at the fund’s manager, told the Financial Times.
Norway has diverted its petroleum revenues into the fund for more than a quarter of a century, building up the world’s largest sovereign wealth investor that until recently only owned public securities. In the past decade, it has become one of the world’s largest property investors, owning large swaths of prime real estate in cities such as London, New York and Tokyo, as well as logistics buildings.
The fund has been able to invest in wind and solar power projects since the start of 2020, and Holstad said it had looked at eight potential projects last year. It took part in one auction for a renewable energy asset but dropped out.