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Unlisted investments in infrastructure for renewable energy

The purpose of this policy is to outline principles and requirements related to investing and managing unlisted investments in infrastructure for renewable energy ('infrastructure') in the Government Pension Fund Global (the "Fund").

Issued 2 December 2019
Last updated 07 June 2022


The investments in unlisted renewable energy infrastructure shall be governed by investment mandates, boards and committees and follow a structured investment and approval process. The Fund is a financial investor and experienced partners will manage the day to day operations of the infrastructure assets. The Fund invests and manages the portfolio in a responsible and environmentally sustainable manner.

Investment mandates

  • The investment mandates for infrastructure shall define investment universe, investment restrictions, investment approval limits and other specific investment rules as applicable.  
  • The investment mandates shall be approved through the reporting line and shall be subjected to annual review.
  • All investment mandates shall be subjected to review and monitoring for adherence to risk limits and mandate-specific investment rules and restrictions. 

Investment process

  • When considering an investment opportunity, the Fund shall assess and make assumptions about power prices, relevant regulation, power production, remaining asset lifetime, operational expenses and other costs.
  • All investments shall be subject to due diligence. The due diligence process shall include relevant risk assessments, such as market risk, liquidity risk, credit risk, counterparty risk, operational risk, legal risk, tax risk and technical risks. The process shall also include assessments of environmental, social and governance risk factors, including risks relating to management of various stakeholders affected by the investment. The process shall include an assessment of whether necessary systems and procedures are in place to manage the investment properly. The process and risk assessments must be documented. All investments shall be subject to formal approval.
  • Infrastructure investments shall be made through subsidiaries to ensure sound risk management and to protect Norges Bank and the Fund's assets.

Investment decisions

  • The decision process for infrastructure investments shall be governed by job descriptions, investment mandates and the LG investment meeting.
  • All material investments and transaction costs shall be considered by the LG investment meeting and advisory boards consisting of internal and external advisors.

Asset management solutions

  • The Fund shall manage the unlisted infrastructure portfolio through three different asset management solutions:
    (i) Joint venture assets managed by the joint venture partner.
    (ii) Joint venture assets managed by an external third-party asset manager.
    (iii) Fund investments.
  • For joint venture assets, the Fund shall review and approve business plans, budgets, the signing or renewal of major off-take agreements, significant works and capital expenditure including sustainability initiatives, and other material matters for each asset. This shall ensure appropriate influence over major decisions reflecting our ownership interest and alignment of strategy and expectations in the management and operation of the investments.
  • Funds regularly have a number of investors and the relative ownership stake is less significant than for joint ventures. As such, the governance rights for investors will be more limited. Transparency requirements as set out in the Fund Management Regulation shall be met. Mechanisms to avoid ownership in issuers excluded from Fund investment universe must be in place.
  • The Fund shall communicate sustainability expectations to partners and asset managers, and maintain a dialogue with them to discuss major sustainability plans and initiatives affecting the investments.

Asset management performed by joint venture partner

  • The Fund shall seek to partner with well-known, and respected investors, with long-term capital to deploy and a long-term investment horizon, whose interests are aligned with those of the Fund.
  • The Fund shall select partners with good knowledge of the markets where we invest whose experience makes them well suited to manage the assets on behalf of the partnership.

External asset management

  • External asset management may be utilised for joint venture partnerships and fund investments.
  • When choosing external asset managers, the Fund shall seek to find a professional and reputable asset manager with good knowledge of specific markets and local presence, and with a good track record of managing assets in relevant markets.
  • The Fund shall seek to minimise asset management costs and include flexible contract termination provisions.

Responsible investment

  • The Fund shall base its responsible investment practices on the Executive Board principles and the NBIM Policy for responsible investment management in Norges Bank, and on internationally recognised environmental, social and governance (ESG) standards relevant to the investment. The Fund will apply the key principles of NBIM's expectation documents where these are relevant to investments in infrastructure.
  • The Fund shall agree and be aligned with its investment partners or asset managers on ESG standards and requirements prior to investment and will follow best market practice.
  • The Fund will seek to include investments in an ESG benchmark survey annually. In addition the Fund shall seek to collect ESG data on its investments in accordance with best industry practice. This may include data on ESG issues which have been identified during the due diligence phase for specific monitoring or follow-up.

Download the policy (pdf)