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The fund was set up in 1990 to manage the immense wealth from Norway’s oil fields.
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Norway’s sovereign-wealth fund is struggling to find the right green-energy projects to invest in, due to fierce competition from rival investors and a lack of opportunities.
With a value of more than $1.1 trillion, the fund is one of the world’s largest, and provides around 20% of Norway’s annual budget. It owns, on average, 1.5% of every listed company in the world.
Nicolai Tangen, the fund’s chief executive since September, told a parliamentary committee on Friday that it is proving difficult to follow through with the strategy to make smart investments into unlisted green energy projects.
“In our experience so far, there are many investors looking for these investments and pricing is thus not always as attractive for us,” said Tangen, according to a translation of parts of his speech published by Reuters.
Set up in 1990 to manage the immense wealth from Norway’s oil fields for future generations, the fund has a mandate for socially and environmentally responsible investments.
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“These investments are subject to the same risk and return requirements as the [fund’s] other investments. In the near term, finding projects that meet these requirements may be demanding,” Tangen said. “There is a lot of competition for these projects.”
It is only as of this year that the fund has been allowed to invest in unlisted renewable energy projects, previously being limited to stocks, bonds, and real estate.
The fund announced in March that it would invest around 100 billion Norwegian krone ($10.5 billion) into private renewable energy projects over the next few years. Its targets include solar-panel installations and wind farms.
Tangen said that the oil fund had not given up on making these types of investments, and had dedicated a five-person team to looking into possible opportunities.
The fund’s new chief is also the founder of AKO Capital, one of Europe’s most successful hedge funds, and has a personal wealth estimated at around $700 million. His appointment to lead the wealth fund brought on a political storm in Norway over potential conflicts stemming from his holding in AKO, which has been transferred to a charity he set up.
