The chair of Iceland’s pensions lobby is encouraging its members to bolster the country’s economy by putting more investment into local infrastructure, and also backing the island’s innovation business sector.

On Tuesday, Guðrún Hafsteinsdóttir expressed her opinion at the Icelandic Pension Fund Association’s (Landssamtök lífeyrissjóða, LL) annual general meeting that pension funds should seriously consider how they invest in local infrastucture projects.

In that context, she cited six infrastructure projects which Minister of Transport and Local Government Sigurður Ingi Jóhannsson has said could go ahead with a relatively short preparation period.

Jóhannsson, a former prime minister, had talked about them as cooperative projects and mentioned the possible involvement of pension funds, she said.

Hafsteinsdóttir said: “I am of the opinion that the interests of all parties involved are well balanced, and the pension funds should therefore consider these possibilities very seriously.”

She also said that in line with the drive in Iceland towards a resource-driven economy rather than resource management alone, pension funds were being encouraged to invest more in innovation.

“In many respects, the environment in this country is very good in the early stages of innovation, but when companies need to grow even more, the issues are often problematic and they have few sources of financing to turn to in Iceland,” said Hafsteinsdóttir, who is also vice chair of the board of Iceland’s second biggest pension fund, the Pension Fund of Commerce (LV).

As a result, she added, many promising companies have moved out of Iceland and set themselves up in neighbouring countries instead of prospering at home and creating value.

“Investing in innovation is riskier than in greener companies, but the benefits can also be greater if successful,” Hafsteinsdóttir said.

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