Asian renewables deliver high returns for Industriens Pension

Denmark’s Industriens Pension has posted returns of more than 100 percent after realising investments in a number of solar and wind projects in Japan, India, Thailand and the Philippines.

The pension fund invested just under DKr 600 million ($99.7 million; €80.6 million) in the projects between 2012 and 2015, and recently sold them for DKr 1.2 billion, a spokesman for the pension fund told Infrastructure Investor.

In a statement, Industriens Pension noted that Japan’s focus on solar energy in the wake of the Fukushima nuclear disaster in 2011 contributed to the high returns.

“The entire Japanese energy supply is undergoing rapid changes, and our Japanese energy investments have yielded a great return,” Industriens Pension’s head of private investments, Jan Østergaard said. The pension fund was among the first investors to focus on the Japanese solar sector, in collaboration with Equis, according to the statement.

Industriens Pension had invested alongside Singapore-based Equis Funds Group in three portfolio companies: Japan Solar, Energon and Energon Soleq, the spokesman said. The fourth co-investment was in Ostro Energy, the Indian renewables platform of emerging markets-focused fund manager Actis. The London-based firm is currently in the process of selling Ostro Energy for $1.5 billion, making it one of the biggest renewables transactions in India.

Earlier this year, Equis Group completed the sale of its renewable energy business, which comprises an 11GW portfolio of renewable energy projects at different development stages across the Asia Pacific region – including the above-mentioned portfolio companies – to a consortium led by Global Infrastructure Partners for $5 billion, making it the world’s largest renewable energy transaction to date.

Industriens Pension plans to exit a number of other renewable energy investments it currently has in developing countries, worth at least DKr 500 million, in the coming months. It expects to achieve returns exceeding 100 percent from those exits as well, according to the statement.

However, the pension fund remains heavily invested in India’s energy sector in partnership with both Actis and Equis, establishing two wind and solar portfolios that supply power to more than 1.3 million households.

The spokesman added that the pension remains committed to the Asian renewables markets with a current exposure of almost DKr 700 million and will continue to work with specialist infrastructure fund managers and local partners to invest in new projects. Its infrastructure portfolio, which totals DKr 17 billion and accounts for 10.3 percent of its DKr 165 billion total AUM, delivered an 8.8 percent return in 2017.