Denmark poised to exclude foreign investors from owning critical infrastructure

Opposition party sponsoring the move says it is ‘not protectionism, but common sense and protection of sovereignty’.

Denmark may be about to enact a law that would prevent foreign investors from owning critical infrastructure, following a vote by members of parliament’s finance committee.

Three opposition groups – the left-wing Socialist People’s Party and Unity List, and the right-wing Danish People’s Party – voted to prevent any foreign investor from owning majority stakes in Danish critical infrastructure businesses or assets.

The move followed Ørsted’s failure this year to sell its electricity distribution company Radius. The sale fell through after the government came under pressure following reported interest from foreign investors.

Goldman Sachs’ historical investment in Ørsted and Macquarie’s former ownership of Copenhagen Airport are also understood to have contributed to the decision. Goldman divested its stake in Ørsted in 2017. Macquarie’s exit from its investment, which took place the same year, prompted a regulatory review, with the government expressing a desire for a more long-term investor.

“In theory, the decision compels the government to propose a way to make the decision into law,” a spokesman for the Danish People’s Party told Infrastructure Investor. “In practical terms, it will not be possible to do so before the upcoming election, which is to be held no later than 17 June. But if the government tries to do anything in violation of this decision, it will potentially have a serious parliamentary problem.

Since 2015, Denmark has been governed by a minority administration led by the centre-right Liberal Party. The government is occasionally supported in parliament by fellow centre-right grouping the Conservative Party and by the Danish People’s Party.

“It is not protectionism, but common sense and protection of sovereignty,” said Socialist Party spokeswoman Lisbeth Bech Poulsen. “For me, it is important that we as politicians work in the best interests of the Danes. Therefore, I have the clear attitude that we should not put the [family] silver up for sale to foreign private equity funds, where the interest in making money is greater than providing security and service to citizens.”

The agreement by the Finance Committee said: “Denmark has a longstanding tradition of critical infrastructure being owned by the community, either in the form of public ownership or in the form of cooperatives owned by consumers.”

Denmark’s Ministry of Finance declined to comment on the matter, stating that the situation was at too early a stage and that the committee’s decision was not yet official government policy.