Norway warms to unlisted infra following election

The new government says it will ‘consider opening’ its $1trn sovereign wealth fund to unlisted infrastructure investments.

The Norwegian government has revealed it will consider investing in unlisted infrastructure via its NKr8.4 trillion ($1.1 trillion; €872.8 billion) Government Pension Fund Global.

The intention was disclosed in its policy agenda after an agreement was finalised with the country’s Liberal Party, which will join the government as the third party in Prime Minister Erna Solberg’s coalition – ending uncertainty since September’s election.

The government’s platform said it “will consider opening the [fund] to invest in unlisted infrastructure and unlisted companies, with requirements for openness, return and risk as for other investments in the GPFG”.

The move marks a significant shift in stance from the government, which has repeatedly rejected encouragement to invest in unlisted infrastructure, despite recommendations from Norges Bank, the fund’s manager.

The most recent dismissal came in April last year after Norges Bank urged investments to be limited to energy, communications and transport sectors in Europe and North America. However, Finance Minister Siv Jensen said at the time that “a transparent and politically endorsed sovereign fund like ours is not well suited to carry the particular risks posed by such investments, compared to other investors”.

A year earlier, Jensen had acknowledged the benefits infrastructure investment could bring to the fund but said “such advantages are difficult to quantify” and ruled out the prospect, adding that “such investments are exposed to high regulatory or political risk”. Jensen has often said that infrastructure investment, particularly in renewables, could be construed as using the fund as a tool to promote Norwegian foreign or climate policy.

The GPFG was established in 1990 to invest revenues generated by Norway’s oil and gas sectors and fill a pension shortfall.

The tentative change in policy was welcomed by Finance Norway, the trade body for Norway’s finance industry. “The size and long-term [nature] of the fund indicates that it is well-suited for such investments, and through its investments can contribute to climate-friendly projects,” the group said. “It is therefore pleasing that the government platform allows for the oil fund to invest in unlisted infrastructure.”