Pension Funds Investing In Renewable Energy

Pension Funds Investing In Renewable Energy – The LHV pension funds have decided to invest up to $14 million in bonds from the renewable energy company Land. Through the investment, the company plans to expand its renewable energy portfolio by increasing operations in Poland.

“By the end of 2020, the company will have 37 MW of solar energy in Poland and 3.2 MW in Estonia,” explained director Priitas Lepasep. “We are using LHV’s investment to fully develop and build an additional 100MW of solar panels. Poland is an attractive market because the state is interested in supporting the development of solar energy and wants to increase sales of renewable energy.

Pension Funds Investing In Renewable Energy

According to Maarja Pärs, LHV Pension Fund Portfolio Manager, investments make three important points important. “We are promoting the growth of Estonian capital abroad, supporting the growth of green energy and achieving good returns for our retired clients,” he said. “So, three good things in one.” Pärs added that in its investments, LHV is always guided by the principle that all financial investments should be based on mutually beneficial relationships. “Now it is growing strongly, and we feel that we can benefit for ourselves,” he explained.

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In addition to Poland, “Solar Energy Parks” are also built in Estonia. Here the company develops not only solar, but also wind parks both on land and at sea. For 1.5 years of work, they have already invested 25 million in renewable energy. euro coins.

“” buy bonds for a portfolio of several pension funds LHV – Roheline, XL, L and M. Of all pension fund managers in Estonia, LHV is the largest investor in the local economy. According to the Estonian Chamber of Commerce and Industry, most of the 645 euros invested in this country was provided by LHV, 51 percent of which is the fund. that is, more than 329 million euros. Support for Polish growth plans is already the third investment of LHV pension funds on the Estonian capital market this year. In January, the funds bought bonds in the Valge Maja office building in the center of Tallinn and in the Peetri Keskus business center near the border (in February).

Prior to this: SEB Bank received the first HUF 1.7 million. Loan in euros to the energy industry for the construction of “solar energy parks”. Renewable energy investment was recently the target of the $141 billion Danish ATP pension fund and $311.6 billion of Canada’s Caisse de dépôt et Placement du Quebec (CDPQ). ATP is investing in the largest geothermal power plant in the European Union and, in a separate deal, CDPQ has acquired a majority stake in Trencap, which owns natural gas and renewable energy company Énergir.

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The Danish pension fund announced that it has now invested in geothermal heating company Innargi, owned by Danish company A.P. owned by a private investment company. Meller stopped. Innargi plans to build and operate a 110 megawatt (MW) geothermal power plant in Aarhus, Denmark, which draws energy from the bowels of the earth. The power plant is expected to start generating heat in 2025 and be fully built by 2030.

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“Geothermal energy has great prospects. It can be used in district heating instead of coal, gas and biomass,” said Bo Voged, CEO of ATP. “These investments are in line with our climate expectations announced in autumn 2021 in connection with COP26. We are confident that these investments will provide a good return for members, and the importance of moving towards green technologies is clear. “

Although ATP did not disclose how much it invested in Innargi, it now owns 37% of the company, while NRGi owns 20% and AP Møller Holding the remaining 43%.

Meanwhile across the Atlantic, Quebec-based CDPQ placed its stake in Trencap in the development capital of Fonds de Solidarité FTQ. Trencap is 100% owned by Énergir through the Noverco holding. The deal increases the pension fund’s stake in Trencap to 80.9%, while maintaining Fonds de Solidarité FTQ’s stake at 19.1%. In June, CDPQ led a consortium that agreed to buy a minority stake in Energir for C$1.14 billion (US$910.8 million).

Énergir, Quebec’s main distributor of natural gas, also produces electricity from wind power through joint ventures. In the United States, it also generates electricity from hydraulic, wind and solar power sources.

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CDPQ is also the majority owner of Invenergy Renewables, which develops, owns and operates sustainable energy generation and storage facilities in the US, Europe and Asia. Earlier this month, Invenergy received a $3 billion investment from private equity firm Blackstone.

Last year, CDPQ announced a climate change strategy to achieve a net zero portfolio by 2050, which includes tripling the value of its low-carbon asset portfolio compared to 2017 to 54 Canadian dollars. billion by 2025.

Tags: AP Møller, ATP, Bo Foged, Caisse de dépôt et Placement du Quebec, CDPQ, Énergir, Innargi, NRGi, Panzió, Renewable Energy, Trencap (Bloomberg) – The acquiring company has made a significant contribution to fossil fuels. to negotiate Now it is creating new green equity funds with record performance to raise institutional money for climate-smart investments.

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Today, private equity firms, including the world’s largest alternative asset manager Blackstone Group Inc., are investing in high-growth industries such as solar energy, carbon capture and battery storage. Part of the attraction comes from the rapid deployment of wind and solar power as public demand for climate analysis increases. This is a change in investment strategy that comes after years of compliance and the start of a refurbishment of a once-troubled site.

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Especially in the last 18 months, environmental, social and governance factors have again become a very strong proposition for North American investors, said Kelly DePonte, managing director of Probitas Partners, which helps raise money for funds. Like their European counterparts, they are starting to prioritize the so-called ESG factors more actively. And where the money goes, private capital goes there.

Private equity investors such as pension funds are “moving away from oil and gas investments despite profits in order to meet their carbon neutrality goals,” DePonte said. “While it’s small now, it’s growing – and many of those early crossovers are huge.”

The New York State General Pension Fund, the largest public pension fund in the United States, committed in December to achieving zero greenhouse gas emissions in its investments by 2040. The California Public Teachers’ Retirement System, the second largest public pension system in the country, is to build a sustainable portfolio of private products and invest between $1 billion and $2 billion over the next few years, while earlier this year the Ontario Teachers’ Retirement Plan promises three net income. zero emissions in its investment portfolio during the year. in decades.

Private equity funds investing exclusively in renewables raised about $52 billion last year, according to data provider Preqin, a record. In addition, the money raised for such funds this year is about 25 times the revenue from fossil fuels.

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“The trend towards ESG-focused investing is starting to cut off capital inflows into the traditional energy space,” said Dave Lowry, head of research at Preqin. Renewable energy bills will rise to $258 billion over the decade to 2020, about one-third of the entire energy sector. However, the share of resources dedicated to renewable energy has increased significantly since 2016 and is expected to reach around 80 percent by 2021, according to Preqin.

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Blackstone, which has long had interests in fossil fuel companies, was among those focusing on the clean energy transition in both private equity and credit trading. Notable investments include energy infrastructure company Saber Industries Inc., energy storage supplier Aypa Power, solar energy companies Loanpal LLC (now known as GoodLeap) and Altus Power America, and energy efficiency business Therma Holdings.

Other private equity players, burned by the shale boom and bust and oil price crash when Covid first hit, are making similar efforts. Warburg Pincus pulls out of fossil fuel investments that were taken from its portfolio; Instead, the next global buyout fund will invest in renewable energy and energy technology. Riverstone Holdings, one of the world’s largest energy private equity firms, is increasing its presence in more sustainable energy sources, Bloomberg reported in March.

Similarly, investors have reduced their stakes in common oil and gas stocks due to low returns in the sector.

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Will Jackson-Moore, head of global private equity, real assets and royalties at PwC, now knows that investors want to see a shift to renewable energy, or at least a strategy to cut emissions from dirty assets. “Transforming energy will require significant costs and losses,” he said.

This change is part of a larger story of a financial institution that is constantly rethinking its investments in companies that directly contribute to climate change and other environmental and social issues. For the first time this year, banks are willing to finance more solar projects than oil, gas and coal producers. US. President Joe Biden has tried to put climate at the center of his agenda, as have European lawmakers, where ESG performance disclosure laws set the global pace of change.

This does not mean that traditional energy investment by private equity funds is dying. In the coming decades, fossil fuels will become important cogs in the global economy. In early June, KKR & Co. announced plans to build a shale oil recovery vessel with two small exploration works totaling $5.7 billion. This will be a combo item.

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