The Danish government has credited the use of “new and innovative” approaches to project funding as the reason the country’s pensions sector has been able to support green projects in emerging markets.

Troels Lund Poulsen, Danish minister for business and growth, said pension funds had shown “remarkable dedication and innovative skills” when deciding on how to fund infrastructure projects across the globe.

He praised new approaches to funding projects pursued jointly by the Danish government and institutional investors in a report outlining several successfully funded projects.

The paper, ‘Financing the Green Transition’, highlights the work of EKF, Denmark’s export credit agency, and the Danish Climate Investment Fund (DCIF), both of which have attracted backing from pension providers including PensionDanmark.

Through the DCIF, PensionDanmark said it had invested in a solar power project in the Maldives, which now supports a desalination plant with renewable energy, and a large wind farm in Kenya.

In its contribution to the report, PensionDanmark says: “Investing in solar power in the Maldives and wind power in Kenya will contribute to reducing the countries’ dependence on the import of fossil fuel.”

It said its allocation was only possible due to the use of so-called blended finance models, combining private capital with public aid for developing countries in areas where investments will have a substantial impact.

Norway’s KLP has been similarly active in the area of blended finance, funding the development of several renewable energy assets in Kenya and Rwanda.