Swedish pensions and insurance group Folksam is investing SEK3bn (€260m) in Copenhagen Infrastructure Growth Markets Fund II (CI GMF II), with the lion’s share of the investment being taken up by the firm’s municipal pension fund subsidiary KPA Pension.
Folksam said SEK2.1bn of the group investment in the fund, managed by Copenhagen Infrastructure Partners (CIP), would be held by KPA Pension, with SEK800m going into the portfolio of Folksam Tjänstepension, and SEK100m being invested by the pension foundation subsidiary Konsumentkooperationens Pensionsstiftelse.
Rebecka Elkert, head of alternative investments at Folksam, said: “The manager specialises in successfully developing large-scale projects in renewable energy, and focuses in this fund on emerging economies such as Chile and Vietnam, countries that today largely depend on imports of fossil fuels for their energy supply.”
This type of investment gave those economies cheaper sources of energy and greater independence in energy supply, she said, adding that each kroner invested made almost three times the difference in reduced carbon dioxide emissions compared to if the investment had been made in more developed markets.
“The investment diversifies the portfolio and contributes to increasing the expected return,” Elkert said.
CI GMF II, launched in December 2023 with a $3bn target size, focuses on investments in large-scale and complex greenfield renewable energy infrastructure projects “in high-growth middle-income markets with strong fundamentals for renewable development and significant impact potential”, according to CIP.
Christina Grumstrup Sørensen, CIP senior partner, said the fund was expected to add 10 GW of “state-of-the-art” green energy to the electricity grid, avoid over 10m tonnes of CO2 emissions per year, while promoting both local investment and job creation and giving its investors an attractive risk-adjusted return.
A year ago, Folksam made a SEK5.6bn investment in CIP’s Copenhagen Infrastructure V.
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