Norwegian municipal pensions giant KLP is investing €200m in debt assets in a range of sustainable energy sectors via a new bespoke fund set up by Macquarie Asset Management, which is also open to other investors.
Aage Schaanning, CFO of KLP, said: “We wish to substantially increase our investments in green infrastructure, in the form of long-tenor debt.”
Even after a thorough search, he said KLP had not been able to find a solution of this type that was green enough, so had to develop one itself.
“The result is an investment strategy that is tailor-made to our green requirements,” Schaanning said, adding that it was first time KLP had made an investment of this kind.
He described it as a “dark green” strategy because it would aim for long-term green investments that were aligned with the EU Taxonomy for Sustainable Activities.
KLP said the new Macquarie fund would invest across the solar power, wind power, hydropower, and sustainable energy storage sectors.
It said Macquarie was the world’s largest infrastructure manager and that through its Green Investment Group - established in 2012 by the UK government to accelerate green investment - was a leading global developer and investor in the renewable energy sector.
Schaanning said KLP’s goal was to fulfil the EU’s sustainability requirements while not impairing its investment performance.
Macquarie aimed to achieve that by investing in loans with very long tenors, he said - a segment of the market he said was expensive for banks to hold on their books due to high capital charges.
The NOK805bn (€79bn) pension provider said a framework had been established to enable the platform to show, verifiably, that its investments were contributing to the achievement of international climate goals.
Tim Humphrey, co-head of Macquarie Asset Management’s private credit team, said: “Our partnership with KLP represents an exciting development for the sector and underlines the significant opportunity that exists for institutional investors to help finance the global shift to renewable energy.”
A KLP spokesman confirmed that the new fund would be open to other investors besides KLP.
The Norwegian pension fund said that for several years, it had had a goal to increase climate-friendly investments, and had invested NOK6bn each year, but in 2020, that those investments had increased to NOK8.8bn.
Yesterday, KLP told IPE it had approved a project aimed at finding ways to invest in the financing of national plans to move Norway’s huge shipping sector to greener fuels.
That project - focusing on exploring financing cases for clean fuels such as hydrogen and ammonia production and distribution, and applications of electrification of ferries and ports, for example - is part of Norway’s Green Shipping Programme (GSP).
While KLP’s potential exposure to green infrastructure debt through that project will be domestic, its investments via the new Macquarie fund will be international, with assets in OECD countries making up between 75% and 100% of the portfolio and non-OECD assets comprising 0% to 25%, the pension fund’s spokesman said.
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