PGGM and Alecta have entered into a credit risk sharing deal with BBVA relating to a €500m portfolio of project loans, a third of which consists of projects related to renewable energy.
The transaction is the ninth co-investment in credit risk sharing by the Dutch and Swedish pension asset managers since they started a collaboration on this in May 2020. Under the deal, Alecta takes a 30% share in all new credit risk sharing transactions initiated by PGGM.
Angélique Pieterse, senior director at PGGM, said: “The longer-dated profile of loans to infrastructural, social and energy related projects fits well with the long-term, buy-and-hold approach of our mandate. Next to that, the transaction reflects both our and our end-investor PFZW’s ambition to contribute to the Sustainable Development Goals.”
She added: “One of the ways to do that is by teaming up with banks that have high-quality origination capabilities and providing them with capacity to grow the lending to projects that help fight climate change.”
For Alecta, the deal is the first risk sharing investment based on project finance loans.
“We look forward to further grow our portfolio and see plenty of scope getting exposure to many different loan books from SME lending to project finance and thereby providing additional capacity to lend to the real economy,” said Tony Persson, Alecta’s head of fixed income and strategy.
PGGM currently has invested €4.6bn in 25 deals in its growing credit risk sharing portfolio. Last year, PGGM’s head of credit and insurance-linked investment Mascha Canio told IPE credit risk shraring can be seen as an alternative investment to equities, and one with a better risk/return profile than high-yield bonds.