PensionDanmark chief takes low carbon advisory role as funds back German offshore wind

Möger Pedersen joins PRI’s Engshuber on panel at low carbon boutique

Torben Möger Pedersen, the chief executive of €19bn Danish labour market pension fund PensionDanmark, has joined the advisory board of a London-based low carbon investment house.

He has joined the panel at Paradigm Change Capital Partners, where UN Principles for Responsible Investment Chairman Wolfgang Engshuber is also a member. It comes as Danish pension funds have emerged as backers of a major offshore German wind project.

Paradigm Change was set up in 2010 and advises investors on low carbon investments and designs collective funding vehicles.

“Renewable energy infrastructure has proven to be an excellent substitute to traditional investments such as government bonds for pension funds,” said Möger Pedersen, whose fund’s renewables investments includes a 30% stake in the 111-turbine Anholt offshore wind facility.

“Now more than ever, pension funds can play an active role in bridging the financing gap, in order to meet the ambitious renewables targets set out by governments.” He added he looked forward to supporting Paradigm Change expand the market. He helped with Paradigm Change’s “Going Green: Institutional Investment in European Green Infrastructure” research report, which was released late last year.

Company founder Dima Rifai said the pension executive’s “leadership in allocating to and investing directly in” low carbon infrastructure was aligned with work it has been doing with its institutional clients.

Among the other members of the advisory team are Simon Currie, Head of Norton Rose’s Energy Practice, Reyad Fezzani, ex-CEO at BP Solar, and SunEdison founder Jigar Shah.Paradigm Change’s investment themes range from clean energy generation, energy storage/infrastructure/efficiency, transportation, water, air & environment, recycling/waste and timber & forestry.

Rifai, who had an investment banking career with Deutsche Bank, J.P. Morgan, RBS and ABN AMRO, is a member of the UK Green Investment Bank’s Advisory Group and is founder of the Low Carbon Bond Group.

The news comes as Danish pension schemes Industriens Pension and PKA have teamed up with Siemens Financial Services and the European Fund for Energy, Climate Change and Infrastructure (“Marguerite Fund”) to invest in a new €1.3bn German offshore wind park.

The consortium’s four partners will each take a 22.5% stake in the 288MW Butendiek project. The remaining 10% stake will be held by wpd, a German firm that is developing the facility.

Another €850m in financing is being provided by a consortium of banks. They include German development bank KfW, Italy’s UniCredit, German regional bank Bremer Landesbank and the European Investment Bank.

Construction of Butendiek, located 32km west of Sylt, will commence in the fall of 2014 be completed the following summer. Technology giant Siemens is providing 80 3.6MW wind turbines for the park at a cost of €700m. Once on stream, Butendiek should provide enough power to supply 370,000 households on an annual basis.

The involvement of Industriens Pension and PKA, which are each committing DKK750m (€100m) to the project, marks the first time any pension money has gone to finance offshore wind in Germany. German pension funds have so far steered clear of the parks, in part because the technology is untested.
With reporting by Jan Wagner