Norway's $1.4 trillion wealth fund, the world's largest, remains committed to investing in offshore wind, a top official said on Tuesday, despite a wave of cancellations of projects due to inflation, supply chain disruptions, and rising costs.
The offshore wind power industry has hit turbulence in recent months, with Britain failing to attract any bidders in its latest subsidy auction, and companies canceling projects or trying to renegotiate terms to increase profitability.
But that is not deterring the fund's interest in taking direct stakes in renewable projects, a new type of investment for the fund since 2020.
It has so far invested in three renewable projects, two of which are offshore wind farms, with its last investment made in March this year.
"We're still thinking that long term, this is an asset class that makes sense for the fund to be exposed to," Deputy CEO Trond Grande told Reuters after it released key figures for the third quarter.
"We see it as more of an opportunity now than we did two years ago," he said, though he added the fund was "a little bit cautious to see where... the new pricing landscape ends".
The fund is an attractive partner as it is a long-term investor and, as it invests the revenues from Norway's oil and gas production, does not need to borrow money to finance projects, which has become more expensive with rates rising.
Grande declined to say whether the fund was getting more interest from companies seeking direct partners in projects.
"The different players know that we are here, what type of capital we represent," he said.
Norway's wealth fund posts $34 bln loss in Q3
(Reuters - Reporting by Gwladys Fouche and Nora Buli; Editing by Jan Harvey)
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