Weeks after Norway’s government proposed that the country’s $1-trillion fund divest from pure exploration and production oil companies, the cabinet said that it will allow the world’s biggest sovereign wealth fund to invest in unlisted renewable energy infrastructure.
“The government is now allowing for the Government Pension Fund Global to be invested in unlisted renewable energy infrastructure. The investments shall be made within the scope of the special environment-related mandates only,” the Norwegian government said in a statement, Oil Price reported.
Norway is also doubling the upper limit on unlisted green energy investments from $7 billion to $14 billion.
“The market for renewable energy is growing rapidly. A major part of the renewable energy investment opportunities is found in the unlisted market, especially in unlisted infrastructure projects.
Expectations of significant investments going forward mean that this market is of interest to institutional investors such as the Government Pension Fund Global,” according to the Norwegian government.
“We are not stipulating that the fund shall be invested in unlisted renewable energy infrastructure, but are enabling Norges Bank to make such investments if deemed profitable,” Norway’s Finance Minister Siv Jensen said.
The world’s largest sovereign wealth fund—created three decades ago to safeguard and manage Norway’s oil wealth for future generations—made headlines last month, when the government proposed that the fund divest from oil and gas exploration companies.
The move by the Norwegian government and the fund comes at a time when investors are increasingly pressing major oil companies to start taking climate change seriously and to prepare their business portfolios for a world of peak oil demand, whenever that may come.