Danish labour market pension funds PKA and PBU are investing DKK75m (€10m) in a project to build a diesel engine catalyst factory in China.
The plant is being built by Danish catalyst supplier Haldor Topsoe.
The two funds are investing in conjunction with the Investment Fund for Developing Countries (IFU), a Danish government-owned fund that co-invests with Danish companies in developing countries.
The total investment between PKA, PBU and IFU amounts to DKK140m, and total overall investment in the new plant is DKK900m, PKA said.
The factory, which is now in the process of being built, will produce catalysts to clean exhaust gas from diesel vehicles, the pension fund said.
Michael Nelleman Pedersen, investment director at PKA, said: “As well as improving the climate and reducing the harmful effects on the health of ordinary Chinese people, we are also pleased we are helping to boost Danish industry and ensure a reasonable return for our members.”
PKA said the increasing air pollution and heavy smog in many Chinese cities had prompted the Chinese government to impose tougher rules on emissions of nitrogen oxides from diesel vehicles, as well as from other sources.
This opened up new market opportunities for Haldor Topsoe, it said.
The factory, located about 100km east of Beijing in Tianjin, is scheduled to open in 2015.
PKA and PBU are investing in the project via IFU Investment Partners (IIP), a trust administered by IFU on behalf of the two pension funds.
PKA runs five labour-market pension funds, in the health and social sectors. PBU is the pension fund for education practitioners.