Idar Kreutzer, Adm.direktør Finans NorgeZero-konferansen 28. 10.2015

Making change happen:

Funding the

Transition

Transition requires significant investment

2

In the next 15 years…

Source: Better growth, Better Climate – The New Climate Economy Report

• The link between

savings and real

investments

• Allocates financial

capital to highly

productive activities

• Supports transitions

within existing firms

and contributes to

the financing

of new enterprises

3

Funding the transitionThe role of the financial services sector

Channels for infrastructure investments

for institutional investors

4

Source: OECD report Long-term investors and green infrastructure, 2013

5

Structuring of projects

Equity

Rating requirements

Ownership model

Duration

Stable cash flows

Proximity to cash flows

Liquidity

Important to establish a good dialogue with the funding source early in the project

An optimal structure requires taking into account the funding source's needs:

Bank loans

Bond market

Infrastructure and pension funds

Challenges in the pension market-Low interest rates-Increased life span-Solvens II

Increased need for investment options to meet long term pension commitments

Infrastructure – good match in theory but limitations due to difficult framework conditions

Source: Finance Norway, Q2 2015 and Pensjonskasseforening Q4 2013

6

Total assets Norwegian pension funds

(NOK Billion)

0

500

1000

1500

Livsforsikring PensjonskasserInsurance Pension Funds

The largest institutional investors

7

Source: ”Funding the future”, Oliver Wyman, 2013

Limited investments in infrastructure

8

• Historic opportunity to stimulate low carbon growth

• Financing is key to a successful transition

• Will require significant public and private investments

• Green bonds is growing in importance

• Better understanding of risk and asset allocation logic, will maximise private sector multiplier on public investments

9

New Climate Economy Report 2015

10