The worlds’ largest sovereign wealth fund, The Norwegian Government Pension Fund, has invested in renewable energy after years in the oil and gas sector. Through the Norges Bank Investment Management, the fund acquired a 50% stake at the cost of 1,374 Million Euros of the Borssele 1&2 Offshore Wind Farm. The offshore wind farm located in the Netherlands is the second-largest in the world and can generate up to 752 MW of wind power.
Unlisted renewable energy infrastructure is a new asset class for the fund, which we invest in to improve the overall diversification of the fund. We look forward to continuing to execute our investment strategy for unlisted renewable energy infrastructure
Nicolai Tangen, Chief Executive Officer at Norges Bank Investment Management
The Sovereign Wealth Fund, which started in 1990, is the largest and the best performing worldwide. In 2020, It gained close to $90 Billion in profits pushing its wealth fund to $ 1 Trillion per results released in January 2021. However, this investment in Renewable energy is the first move away from its usual investment in bonds, equities, oil and real estate. Additionally, it has stakes in major companies worldwide, including Apple, Microsoft and Samsung.
Globally, we have seen state-owned funds making huge commitments financially into renewable energy, which is urgently needed to enhance renewable energy. In January 2021, Qatar Investment Authority subsidy partnered with Enel to invest close to $160B in ten years in South Africa and Zimbabwe. Elsewhere, Ontario’s Teachers Pension Plan Board put $1.25B in a Singapore-based Renewable Energy firm Equis Development.
Though the move into renewable energy by wealth funds has been slow, the Norwegian Wealth Fund’s move may hopefully spark and encourage more wealth funds to put money into Renewable Energy Investment.
The Borssele 1&2 Offshore Wind Farm
The Netherlands Government set aside a 344km2 zone in the Northern Sea to explore Renewable energy to cater to around 16% of its energy demand. The zone is set to explore the 3,500 MW potential of wind power. The Borssele Wind Farm 1&2 is located at depths of 14m, and 38m is set to take advantage of the regions wind speed, whose annual estimates is at about 9.5m/s. The wind farms are equipped with 94 Siemens Gamesa turbines, with each estimated to produce energy to power 8,000 Households.