EUROPE – PensionDanmark is investing £128m (€149m) in a planned biomass power plant in the UK, as the first project for its new joint venture with Danish engineering and contracting firm Burmeister & Wain Scandinavian Contractor (BWSC), a subsidiary of Mitsui.
The new joint venture, BWSB, has the framework to set up, own and operate more power plants internationally, the Danish labour-market pension fund said.
The initial investment of £160m – £32m of which will come from BWSC – will go into the Brigg Renewable Energy Plant, which will be built in Lincolnshire.
Torben Möger Pedersen, PensionDanmark's chief executive, said: "We have found a model that provides PensionDanmark with an attractive return with limited risk."
Risk was kept within bounds because most of the investment took the form of loans, the bulk of earnings was regulated, and costs were fixed via long-term contracts, he said.
BWSC, a Danish company acquired by Japan's Mitsui Engineering & Shipbuilding in 1990, will be in charge of building, operating and maintaining the plant, which is expected to start operating in early 2016.
The plant will have a capacity of 40MW and mainly be fuelled with locally sourced straw, PensionDanmark said.
It is expected to produce enough energy to cover the total consumption of 70,000 households and result in an annual CO2 emissions reduction of around 300,000 tonnes, it said.
Separately, PensionDanmark said it was in talks with the Faroese government about a planned undersea tunnel project.
The 11km tunnel would link the Faroese capital Thorshavn with the island of Eysturoy, home to the country's third-largest town Runavik.
The pension fund said that, via its fund Copenhagen Infrastructure I, it was discussing the project with the Faroese government, together with Faroese life insurance company LIV.
Talks covered financing for the tunnel, as well as its establishment and subsequent operation, PensionDanmark said.
Möger Pedersen said the parties had established a joint project company to undertake the task.
"We are now awaiting the outcome of the political process that is now going on, before we go any further with the project," he said.
PensionDanmark has DKK6bn (€800m) of its DKK145bn in total assets in direct investments in infrastructure.
Over the next four years, it has said it plans to invest a further DKK12bn in different infrastructure projects, with half of this invested via the Copenhagen Infrastructure I fund.