Norway's largest pension company to make $245 million 'dark green' investment
Norway's largest pension company KLP said it had teamed up with Macquarie Asset Management to invest 200 million euros ($245 million) in a new fund targeting long-term loans in "dark green" infrastructure with zero or near-zero carbon emissions.
The deal involves Macquarie identifying loans linked to solar, wind, hydro, sustainable energy storage and other projects aligned with the European Union's sustainable finance taxonomy, which defines environmentally friendly activities.
Unlike other funds, however, the venture will target longer-term loans of up to 20 years and actively seek out "dark green" investments, with zero or near-zero carbon emissions, KLP said.
"We wish to substantially increase our investments in green infrastructure, in the form of long-tenor debt," KLP Chief Financial Officer Aage Schaanning said.
"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," Schaanning added.
KLP said it hopes other pension funds will also invest in the fund, which it thinks can grow to around 1 billion euros.
Schaanning said it aimed to be "very ambitious" in meeting the EU's goals without giving up returns, and would do this by investing in the market for longer loans, which "is expensive for banks to hold on their books due to high capital charges".
In 2020, KLP invested 8.8 billion Norwegian crowns ($1.1 billion) in "climate-friendly" investments, and aims to plough at least 600 million euros into such investments every year.
"Considerable investment is needed in green infrastructure if we are to mitigate the effects of climate change and accelerate our transition to a Net Zero society and economy," said Tim Humphrey, Co-Head of Macquarie's Private Credit team.