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Norway parliament to debate next year whether wealth fund can invest in unlisted renewables

OSLO (Reuters) - Norway’s parliament should discuss next year whether the country’s $1 trillion sovereign wealth fund should be able to invest in unlisted renewable projects such as solar parks and wind farms, parliament’s finance committee said on Thursday.

FILE PHOTO: The trading floor of Norges Bank Investment Management, the Nordic country's sovereign wealth fund in Oslo, Norway, June 2, 2017. REUTERS/Ints Kalnins/File Photo

Norwegian politicians have been debating whether the world’s largest sovereign wealth fund should invest in a new asset class on top of the stocks, bonds and real estate it holds.

While there had been broad support to allow the fund to invest in renewable infrastructure, the minority government said in March it was too early to present a bill to parliament on the subject, and did not provide a precise timeline.

On Thursday, a united finance committee instructed the government to present a bill next year on the topic so parliament could debate and vote on the question, a key lawmaker told Reuters.

“We want to have a better balance between the fund’s return and risk,” said Svein Roald Hansen, the lawmaker who led the committee’s work on the government’s white paper.

Green groups welcomed the news as it will likely be voted through next year. The ruling Conservatives, the opposition Labour Party and at least five smaller parties are in favor.

“This is an important contribution to achieve climate targets,” said Baard Vegar Solhjell, head of the WWF conservation group in Norway.

The government said in March it was concerned about the political risk of the fund being stuck in a problematic investment it cannot get out of as easily as if it were a listed company.

The fund is managed by a unit of the central bank called Norges Bank Investment Management. Parliament decides the fund’s mandate.

The committee shares that view and wants to progress “carefully” when it comes to allowing the fund to invest in unlisted infrastructure projects that are not renewables, such as bridges or roads.

“Other types of unlisted infrastructure are more complicated. They can break with the principles of openness and transparency of the fund,” parliament’s Hansen said.

The government has also said that were the fund to be allowed to go into unlisted renewables projects, it should be limited to the fund’s current green investment mandate, which amounted to 75 billion Norwegian crowns ($9.18 billion) at end-2017.

Green groups say this is too low, and the finance committee said on Thursday it should be “significantly higher”, without giving a sum.

Editing by Terje Solsvik and Adrian Croft