Norway’s huge oil-backed wealth fund invests in an offshore wind farm

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Norway’s sovereign wealth fund has agreed to pay round 1.375 billion euros ($1.63 billion) for a 50% stake in one of many world’s largest offshore wind farms, Orsted’s 752 megawatt (MW) Borssele 1 & 2 facility.

Managed by Norges Bank Investment Management, the fund — whose wealth stems from Norway’s huge North Sea oil and fuel reserves — is the world’s largest and value greater than $1.Three trillion. In an announcement Wednesday, NBIM described the deal as its “first investment in renewable energy infrastructure.”

The transaction is about to finish in the second or third quarter of 2021. Under the phrases of the deal, Orsted will retain its place as co-owner of the wind farm and deal with operations and upkeep.

“We are excited to have made our first unlisted investment in renewable energy infrastructure, and we look forward to working alongside Ørsted on delivering green energy to Dutch households,” Mie Holstad, who’s chief actual belongings officer at Norges Bank Investment Management, mentioned in an announcement.

Located 23 kilometers off the Dutch coast, Borssele 1 & 2 makes use of 94 wind generators from Siemens Gamesa. According to Orsted, it’s the world’s second-largest operational offshore wind farm and “supplies renewable energy equivalent to the annual power consumption of one million Dutch households.”

Europe is a serious participant in offshore wind energy and residential to a variety of large-scale amenities.

The world’s first offshore wind farm, in waters close to the Danish island of Lolland, was commissioned in 1991.

In 2020, the sector attracted over 26 billion euros of funding, a file quantity, in keeping with current figures from business physique WindEurope.

The U.S. offshore wind sector, in contrast, remains to be small however might be set for a big enlargement in the approaching years below new plans introduced by the Biden administration on the finish of March.

Norway’s technique

Norway’s fund has what NBIM describes as “a small stake” in over 9,000 corporations globally, with its funding technique primarily based on pointers set out by the nation’s ministry of finance.

“The fund must not be invested in companies that produce certain types of weapons, base its operations on coal, or produce tobacco,” NBIM says.

“The fund must also not be invested in companies that through their conduct contribute to violations of fundamental ethical norms,” it provides.

As of March 3, 2021, corporations excluded from what NBIM describes as “the fund’s investment universe” embrace: German utility RWE; tobacco big Philip Morris International; and BAE Systems.

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