Better Energy to deploy 1GW of subsidy-free solar thanks to pension fund deal

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Image: Better Energy.

Around 1GW of solar projects are to be developed by Better Energy in Denmark and Poland after the renewables company secured what it describes as a “historic agreement” with a Danish pension fund.

The deal between Industriens Pension and Better Energy will include DKK1.5 billion (US$243 million) in equity from the parties, supplemented with long-term project financing, typically in the form of mortgage loans.

In total, the equity investment and project financing will be almost DKK4 billion (US$648 million), making it “the largest Danish solar investment to date”, according to Better Energy. The company said the deal will provide a “huge boost to the deployment of solar parks without state support”.

The first five solar parks covered by the agreement are already in operation, while most are expected to be operational in 2021 and 2022. The plan is to build around three-quarters of the solar projects in Denmark, while the remaining are likely to be developed in Poland.

“For the first time, Danish pension savings will help accelerate a massive scaling up of subsidy-free green energy production in Denmark. In that sense, our partnership with Industriens Pension marks the beginning of a new era,” said Rasmus Lildholdt Kjær, CEO of Better Energy.

“The next chapter in the green transition will entail accelerating the deployment of renewable energy capacity without state support, together with ensuring critical widespread community ownership and backing. And this is precisely what we are doing with this agreement.”

Better Energy is developing, building and operating the solar projects, and the agreement is a 50:50 partnership.

Laila Mortensen, CEO of Industriens Pension, said as well as marking a “real breakthrough” for solar energy in Denmark, the investment is expected to secure “solid, long-term returns” for the fund’s members, while also “contributing significantly to accelerating the scale and pace of the green transition”.

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