DENMARK - PensionDanmark plans to boost its infrastructure investment by as much as DKK10bn (€1.3bn) over the next five years, and the fund welcomed government moves to create better opportunities for public-private partnership (PPP) projects in Denmark.
Torben Möger Pedersen, managing director of the labour-market pension fund, said: "My estimate is that we can invest DKK5bn to DKK10bn more in infrastructure in the next five years, if the right projects come up.
"So it's positive that with the package to promote competition (Konkurrencepakken), the government has started a dialogue with investors about creating better opportunities for PPP projects in Denmark."
Altogether, PensionDanmark said it has invested or committed DKK8bn to infrastructure, including a solar cell plant in Spain, an energy plant in the US, motorways in the UK and a large hospital in Stockholm, as well as major investments in the Nysted and Anholt offshore wind farms in Denmark.
The fund aimed to increase its infrastructure allocation to 10%. It said the long-term investment class suited pension savings well, with a stable return that gave scheme members a good return significantly higher than bond yields.
PensionDanmark said it was growing fast, with assets under management expected to increase to DKK175bn in the next 5-6 years from more than DKK100bn now.
Möger Pedersen described the fund's involvement in offshore wind farms as a breakthrough for Danish pensions investment in infrastructure.
"A model was developed that can and should be used in other areas," he said. "The experience we have now built up in the area and internally in the organisation gives us the courage to do more."
Speaking at the recent AGM of pensions industry association Forsikring & Pension, minister for Economic and Business Affairs Brian Mikkelsen said PPPs were still a new type of cooperation in Denmark.
"The government wants to open the way toward making it easier for public authorities to offer larger construction projects as public-private partnerships, which pension funds and others can invest in," he said.
The government wanted public authorities to make routine evaluations as to whether PPP was the right model whenever they planned a new large construction project, he said.
Mikkelsen said: "This is also why the government has, as part of the agreement on the Konkurrencepakken, proposed legislation that local and regional construction projects of more than DKK20m should be covered by the state construction law rules on PPPs."