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Norway fund should be able to invest in unlisted renewables - ruling party

OSLO (Reuters) - Norway’s $1 trillion sovereign wealth fund should be allowed to invest in unlisted renewable projects such as solar parks and wind farms, the ruling Conservative party voted on Saturday.

The world’s largest sovereign wealth fund, which invests Norway’s oil and gas revenues in stocks, bonds and real estate, has for many years sought permission to invest in unlisted infrastructure assets.

“Let the fund invest in unlisted infrastructure for renewable energy with the same demand for profitability as for other investments,” said the motion.

The decision strengthens the possibility the fund could invest in the new asset class as the Conservatives are the leading party in Norway’s minority coalition government.

The other parties are the right-wing Progress Party and the centrist, pro-green Liberals.

“Opening for infrastructure gives the fund the possibility to diversify, which will be good for the fund, Tina Bru, a Conservative lawmaker who voted in favor, told Reuters.

“In addition it is a good bonus that it will contribute towards a shift to a low-carbon society, which must happen globally if we are to achieve climate targets.”

Bru said the Conservatives had also voted in favor of a motion that said the government “should consider whether to let the fund invest in unlisted infrastructure and unlisted firms, with the same demand for transparency, return and risk as for other investments.”

The fund’s management is allowed to invest in unlisted firms that are imminently seeking stock exchange listing. It has complained in the past that it was missing good opportunities because it could not invest in them at an earlier stage.

“This move by the ruling Conservatives will act as a strong signal to other investors and sovereign funds, from London and New York to Tokyo and Seoul,” Paul Fisher, a former director of the Bank of England who is Senior Associate at the Cambridge Institute for Sustainability Leadership, told Reuters.

“This prudent Conservative Party decision is a major turning point which should now pave the way for the Parliament to instruct the fund to enter and profit from the trillion dollar unlisted renewable infrastructure market,” said Tom Sanzillo, Director of Finance for the U.S.-based Institute for Energy Economics and Financial Analysis.

Finance Minister Siv Jensen will present a white paper on the fund on Tuesday.

She has in the past rejected the possibility to allow the fund to invest in unlisted infrastructure as a whole, not just for renewables, citing political risk.

“Now Parliament needs to follow up. I can’t see any good reasons why the (finance) ministry should come to a different conclusion,” Martin Norman, the head of Greenpeace Nordic’s Sustainable Finance Campaign, told Reuters.

(This version of the story corrects spelling of interviewee’s name in 10th paragraph.)

Editing by Terje Solsvik and Stephen Powell