Norway's wealth funds continues to invest in renewables, despite the market downturn

A senior fund official stated on Thursday that Norway's $1.8 billion wealth fund, which is the largest in the world, will continue to invest in renewable assets, despite recent market downturns. The fund will also seek out opportunities both in the public and private markets.

In 2024, renewable energy assets will have underperformed the market significantly. This includes some of the previous favourites among investors such as Danish offshore developer Orsted.

The fund's investments in renewable energy infrastructure that is not listed, including stakes in Orsted's offshore wind farms and the renewables portfolio of Spanish utility Iberdrola, showed a negative return for 2024.

The fund is still committed to renewables despite recent negative returns, stating that it makes long-term sense.

Harald von Heyden is the global head of energy infrastructure at the fund. He told a conference held in Oslo that "we think this is smart for very, very long term investors."

He added, "You could probably get renewable assets at a much lower price if you purchase them as shares."

He added that the volatility on the private market is lower, and that being active both in the public and private markets will offer good deals in the future.

The fund has plans to do so and recently restructured its renewable energy investment teams to combine their unlisted and listed portfolios.

The Norwegian Parliament has allowed the fund to invest in renewable energy projects that are not listed, so long as the projects are located in Europe or the United States.

"It has been a slow beginning. We have held back. Von Heyden added that the fund is seeing more opportunities, and the team has grown to 20 members.

Offshore wind is still the fund's top strategic target because it is based in Europe and has a wide range of partners.

We also want to make deals with other renewable energy technologies. Von Heyden added that enabling technologies like grid and storage were also important.

(source: Reuters)