Denmark’s Industriens Pension is forming a partnership with Danish renewable energy infrastructure firm Better Energy, investing up to DKK4bn (€537m) in new solar parks the company is building in Denmark and Poland.

The labour-market pension fund said an initial DKK1.5bn would be invested via equity - evenly split between the two parties - with the remaining investment amount of up to DKK2.5bn being channelled into the new and forthcoming facilities in the form of debt financing.

Laila Mortensen, Industriens Pension’s chief executive officer, said: “This is the first time that solar energy has been rolled out on this scale in Denmark, and the investment marks a real breakthrough for solar energy in Denmark.”

She said the investment was expected to secure solid, long-term returns for the pension fund’s members.

Industriens Pension, which had total assets of DKK194bn at the end of 2019, said this was the largest investment in solar cells ever made in Denmark, with the first five photovoltaic parks covered by the agreement already having been put into operation.

The majority of the parks are expected to begin operating over the next two years, it said.

Lildholdt Kjær, Better Energy CEO, said: “For the first time, Danish pension savings will help accelerate a massive scaling up of subsidy-free green energy production in Denmark.”

Kjær added that next step in the development of green energy was to ramp up renewable energy capacity without state support, while ensuring widespread community ownership and backing of infrastructure.

The partnership between Better Energy and Industriens Pension is 50/50 in terms of ownership, and Better Energy will be responsible for operating the solar parks.

Industriens Pension said the partners planned to build around 75% of the new solar parks in Denmark, with the remaining facilities likely to be located in Poland.

In all, the new power plants would achieve a total energy capacity of around 1 gigawatt, the pension fund said, which it said corresponded to an annual reduction of more than 350,000 tonnes of CO2.

Mark Augustenborg Ødum, executive vice president of partnerships at Better Energy, said the investment established a robust partnership model for how to rapidly scale up the green transition.

“This is imperative if Denmark is to have a reasonable chance of achieving its climate targets,” he said.

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