PensionDanmark to provide €1.3bn to support Danish exports
DENMARK - PensionDanmark has agreed to provide DKK10bn (€1.3bn) in financing to support the country's exports in a deal that gives the pension fund a yield above government bonds for state-guaranteed loans.
The €14.2bn pension fund signed a three-year deal with Denmark's export credit agency (EKF) to lend to foreign companies placing orders with Danish businesses.
The loans will be used mainly to smooth exports of wind farms, and the agency described the public-private pact as a new tool to support economic growth.
PensionDanmark managing director Torben Möger Pedersen said: "On the one hand, we are getting the opportunity to support Danish exports and employment at a time when it can be difficult for many businesses to get bank financing.
"On the other, it is a good investment for PensionDanmark's members because we will get an interest rate of a little over the yield on Danish government bonds, while at the same time the EKF guarantees provide security that our loans will be repaid."
The parties expect wind farms to make up a significant portion of the joint projects, but they said a wide range of sectors and investments could be involved.
Ole Sohn, the new Minister for Business Affairs and Growth, welcomed the public-private financing deal.
"It will help strengthen Danish exports and therefore create new jobs in Denmark," he said.
The first loan under the scheme is already in place.
Arise Windpower and Platina Partners are building a wind farm in Jädraås in Sweden with the Danish firm Vestas as supplier of 66 wind turbines.
The loan is for a total of DKK2bn, with PensionDanmark lending around DKK1bn of this and banks DnB NOR and SEB providing the rest.
In practice, the cooperation means PensionDanmark will provide the financing for large Danish export orders, in conjunction with one or more banks.
EKF will guarantee the money, and investments will take place under market conditions.
The cooperation agreement between EKF and PensionDanmark will provisionally run for three years, with the option to extend it.
It was signed after six months of talks.