3GF session on Financing Green Growth

Opening speech by Minister of Business and Growth, Mr. Ole Sohn, at the 3GF session on Financing Green Growth, the 9th of October 2012.
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Tuesday, October 9, 2012

[THE SPOKEN WORD ONLY]

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Introduction

Thank you, Barbara Buchner for the introduction. Thank you also for assisting with preparing and arranging the session and for being our moderator today.

I’m very pleased to welcome you all and take part in this discussion about financing green growth.

Setting the scene

The global challenge of resource scarcity and rising prices of resources and energy implies an urgent need for large scale green investments – in renewables and in infrastructure.

But the challenges of rising public debts in some parts of the world and the need for financial institutions to consolidate implies an intensified focus on

1)           finding alternative sources of capital and

2)          finding new innovative ways of sharing of risks to attract investors.

Danish green policy

The Danish government has set ambitious targets to reduce our greenhouse gas emissions by nearly 40 percent by 2020 (compared to 1990-levels). Achieving this target will require large investments in wind power, energy savings etc.

As part of the government’s targeted policy we have appointed seven Growth Teams where business, organisations and other stakeholders are looking more closely at industry specific growth conditions. One growth team on energy and climate has a focus on innovative financing of new energy related investments, including via public-private partnerships.

Case in Denmark

An example of public-private collaboration is the collaboration between pension funds and the Danish Export Credit Agency.

Since last year, the pension funds PensionDenmark and PFA have made funding available for Danish export orders through the Export Credit Agency.

With this agreement it is possible for foreign enterprises to obtain loans to place orders with Danish companies, based on the standard guarantee from the Export Credit Agency that loans will be paid back.

The first project to take advantage of this new arrangement is the construction of the wind farm in Jädraås in Sweden. PensionDenmark is here financing half of the project with direct loans guaranteed over a period of 15 years. The deal will yield PensionDenmark a return, which is 1-1.5 % above government bonds. Vestas is supplying the wind turbines.

The project was awarded the “European Wind Deal of the Year 2011” by the accredited London-based Project Finance Magazine.

The CEO of Pension Denmark, Mr. Torben Möger Pedersen, might say more about this project in his presentation today.

Burning platform

The overall question is how to scale up similar public-private partnerships - also at the global level.

Our task is to identify the greatest barriers and the greatest investment risks, and find new innovative solutions to overcome the barriers and share the risks. The Danish wind farm example can serve as an inspiration.

Thank you for your attention.