Danish pension funds commit £130m to climate change projects
Danish Climate Investment Fund will promote renewable energy, energy efficiency and clean transport schemes in emerging economies in regions including Africa and Asia
Danish pension funds, with government support, are set to invest in a state fund to finance climate change mitigation and adaptation projects in developing countries.
PensionDanmark said it had committed 200 million Danish crowns (£22.3 million) to the fund, while a further 1 billion crowns will come from pension funds PKA and PBU, private investment fund Dansk Vækstkapital, the Investment Fund for Developing Countries and the Danish government.
PensionDanmark has said that the Danish Climate Investment Fund will run for four years and have an annual return of 12 per cent.
The fund is expected to receive a further 200 million crowns from private investors in a second investment round, which will see the fund have a total of 1.4 billion crowns at its disposal.
Investments will focus on projects which reduce greenhouse gas (GHG) emissions such as renewable energy, energy efficiency and transport schemes in emerging economies in regions including Africa and Asia.
It will also finance projects which help communities prepare for the effects of climate change, such as disaster preparation and coastal management.
The fund will only finance projects which have a Danish financial interest, meaning that a Danish partner must co-invest or participate as a supplier of equipment or technology.
PensionDanmark has 642,000 members and had €16 billion of assets under management at the end of 2011. It expects those assets to exceed €24 billion by 2016.
