A consortium of pension funds in Denmark has agreed to commit DKK1.2 billion (US$219 million) to the Danish Climate Investment Fund (DCIF), a vehicle for financing climate resilience projects and promoting Danish solar and other renewable energy technologies in developing countries.
The fund aims to assist small and medium-sized Danish companies gain access to new international markets, co-funding solar projects and opening markets for Danish suppliers of solar equipment, as well as funding other renewable energy, energy efficiency and environmental programmes in developing countries.
The agreement has been struck between pension funds Pension Denmark, PKA, Pædagogernes Pensionskasse (PBU) and Dansk Vækstkapital, the Danish government and the Investment Fund for Developing Countries (IFU). Another DKK200 million is expected from further investors.
The fund will run for four years, over which time it will invest in green projects in 150 countries in Africa, Asia, Latin America and in emerging European economies.
Investment is to follow corporate social responsibility (CSR) policy, using UN and international guidelines following on from the UN Copenhagen climate summit in 2009 and its decision to raise capital for climate investment in developing countries. The UN aims to raise US$100 billion every year for climate change projects in developing countries till 2020.
Public funding of DKK275 million (US$50 million) came from the Danish government and DKK250 million (US$45 million) from the IFU.
Pension Denmark communications consultant, Kaare Nygaard Pedersen told PV Tech the company’s investment is in keeping with its aims to increase investment in renewable energy infrastructure over the next three years to account for 10% of assets.
Torben Möger Pedersen, Pension Denmark’s CEO, said the fund “marks a win-win-win effort where we contribute to growth and employment in developing countries, fight climate change and provide better opportunities for Danish companies in new and difficult markets.”
Pedersen said: “We expect the Danish Climate Investment Fund to deliver a solid return to our members and to contribute to Danish companies strengthening their position in the new emerging markets.”
The IFU is to manage the fund, which has an expected 12% annual return. Tommy Thomsen, managing director of IFU said: “We have invested in projects which have had a positive impact in the developing countries and provided access for Danish companies to new markets, while IFU has continuously made a profit. We expect this to be the case with the new climate investment fund.”