(August 14, 2013) — A growing number of European pension funds are throwing their investment might behind projects that use waste materials to produce enough energy to meet 21st Century needs.
This week, Danish pension provider PensionDanmark announced a joint venture with Burmeister & Wain Scandinavian Contractor A/S (BWSC) to build, own, and operate biomass power plants internationally.
“We have found a model that provides PensionDanmark an attractive return with limited risk,” said Torben Möger Pedersen, CEO, PensionDanmark, in a joint statement with the fund’s new partners.
The first power plant to open will be in Lincolnshire in Eastern England. It will be primarily straw-fuelled and produce enough energy for 70,000 households and result in an annual CO2 emissions reduction of around. 300,000 tonnes.
The move follows an investment by the Merseyside Pension Fund, one of the largest in the UK public sector, in an anaerobic digester in North Wales. The plant was opened this year by HRH the Prince of Wales and will begin operations later this year.
The investment benefitted North Wales, Investment Manager Paddy Dowdall told aiCIO last month, by helping the local authority deal with its mounting waste pile and providing renewable energy.
“The overall return on investment for us is also attractive,” Dowdall said, “and provides a solid and predictable yield.”
Several European pension investors, including Netherlands giant PGGM, have already caught on to the renewable energy craze, funding solar and wind harvesting plants to create energy.
Traditional fuel sources continue to attract yield-hungry investors too as investors are turning to energy-creating infrastructure to provide income, which is viewed as being more stable than that from relatively volatile markets.
Last month, the Pension Association, the Japanese federation of employees’ pension funds, announced it was making its first direct infrastructure investment, and had entered an agreement to buy a stake in a gas-powered power plant in Michigan.
The federation joined with infrastructure stalwarts, Borealis—an affiliate of the Ontario Municipal Employees’ Retirement System (OMERS)—in the deal.
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