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Sovereign Wealth Funds

Norway sovereign wealth fund doubles permitted allocation to renewable energy infrastructure

Government Pension Fund Global, Oslo, can invest up to 120 billion Norwegian kroner ($13.9 billion) in unlisted renewable energy infrastructure via segregated mandates, Norway's Ministry of Finance said Friday.

The investment limit of the 8.89 trillion Norwegian kroner sovereign wealth fund will double from 60 billion kroner.

"The proposed regulation will enable Norges Bank to adopt a gradual approach in a relatively small market and to invest in a cost-effective manner," said Siv Jensen, Norway's minister of finance.

Ms. Jensen added: "These investments shall be subject to the same profitability and transparency requirements as the other investments of the fund. We are not stipulating that the fund shall be invested in unlisted renewable energy infrastructure, but are enabling Norges Bank to make such investments if deemed profitable."

Also Friday, Norway's ministry of finance proposed to exclude emerging markets sovereign and corporate bonds from the fixed-income benchmark tracked by GPFG, following a review.

Norges Bank Investment Management, however, will continue to actively invest in emerging-market fixed income.

"Along with certain adjustments to the country weightings for government bonds, the changes proposed will facilitate lower transaction costs in the management of the fund," Ms. Siv said in a separate release.

Norges will remove the bonds of Chile, the Czech Republic, Hungary, Israel, Malaysia, Mexico, Poland, Russia, South-Korea and Thailand, which are classified by its index provider, Bloomberg, as emerging markets.

However, Norges may still invest up to 5% of fixed income portfolio in emerging-market government and corporate bonds.

Changes under the proposal will be implemented after Parliament deliberations.