March 31, 2017 Read More →

Norway Government Digs in Against Renewable Infrastructure Investment, Ensuring ‘Further Debate on This Topic’

Reuters:

The minority government repeated it was opposed to letting the fund invest in unlisted infrastructure such as roads, bridges and wind farms, due to the political risk these investments may carry and their high transaction costs.

It had opposed loosening the rules in last year’s review but lawmakers had said the question should be discussed again.

“This is disappointing. The government is not delivering on the order from parliament on infrastructure. This will guarantee that there will be a further deep debate on this topic, so this question is not closed because of this no by the government,” Torstein Tvedt Solberg, the spokesman for the opposition Labour Party, on the fund, told Reuters.

The government confirmed it would propose that the fund be allowed to increase its equities allocation to 70 percent from 60 percent, moving away from bonds, and that expected annual spending from the fund be cut to 3 percent from 4 percent.

Tom Sanzillo, director of finance at the U.S.-based Institute for Energy Economics and Financial Analysis, said the government should look again at unlisted infrastructure investments.

“They seem to be walking away from a market that is a trillion dollars and that is growing exponentially in the coming years. This is not prudent,” Sanzillo, who wrote a 2017 report on renewable energy infrastructure investment and the Norwegian fund, told Reuters.

“They appear to lack confidence in their own abilities and that is worrisome.”

Norway’s wealth fund may be allowed to invest in unlisted stocks next year

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