Norway fund's financial clout gives it edge in renewable deals, executive says

Norway's $1.3 trillion wealth fund, which has faced stiff competition buying renewables assets, believes its financial clout could give it an edge as economic clouds darken because it doesn't need external capital, a top executive told Reuters. The fund, the world's biggest, has been allowed since 2020 to make direct investments in renewable energy projects and has plans to invest some 100 billion Norwegian crowns ($10 billion) in doing so.

Norway's $1.3 trillion wealth fund, which has faced stiff competition buying renewables assets, believes its financial clout could give it an edge as economic clouds darken because it doesn't need external capital, a top executive told Reuters.

The fund, the world's biggest, has been allowed since 2020 to make direct investments in renewable energy projects and has plans to invest some 100 billion Norwegian crowns ($10 billion) in doing so. But it has had trouble spending the cash, only signing two deals so far.

However, this could be about to change for the fund, which invests the Norwegian state's revenues from oil and gas production, as a tougher economic backdrop may make it harder for competitors to secure financing. "When we have entered these uncertain times, we, as investors, now have an advantage considering we already have capital," Mie Holstad, the fund's chief real assets officer, said in an interview.

"It makes us a very reliable bidder, and I believe that is currently highly valued." Since 2020, the fund has looked to participate in several transactions but did not because "the prices have been too high", she said.

"We have seen a very competitive market, and we think that is still the case," said Holstad. Last week, the fund said it had agreed buy a 49% stake in a portfolio of Spanish solar plants and wind farms majority-owned by Iberdrola, which it bought for 600 million euros ($653 million).

Its first such investment was in a Dutch wind farm, jointly with Denmark's Orsted in 2021. The fund aims to invest some 2% of its value in renewables infrastructure over time. As of the end of 2021, these investments accounted for 0.1% of its value.

($1 = 0.9191 euros)

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