It would be “truly ground-breaking” for Danish pension funds to fund the building of new Danish warships, Insurance and Pension Denmark (I&P Denmark) CEO, Kent Damsgaard, has said.

His comments follow a report sent to the Danish government from the maritime partnership, which sets out a route to the creation of new and Danish-built warships for the country’s armed forces.

I&P Denmark has welcomed the report, and in particular, is pleased that it contains a model for cooperation on building ships with, for example, pension companies. The association hopes that the Danish Parliament will follow the recommendations.

“It is against a sad backdrop of war in Europe that we are facing a renewal of the Danish fleet. The recommendations from the partnership show that there is a way forward to build the new ships in Denmark. It would be truly ground-breaking if Danish pension funds could be brought into play to strengthen Denmark and at the same time ensure a good return for Danish pension savers,” Damsgaard said.

He continued: “From the pension industry's side, we are open to further cooperation on financing opportunities, and the report points to some important initiatives for companies and investors to see an investment case in the ships and contribute to Denmark's security and security of supply.”

Previous announcements from the Danish government show that over the next 20-25 years, Denmark will need to invest up to DKK 40bn in new and modern ships to have an up-to-date and combat-capable fleet.

Among other things, the report points out how the financing of the major projects can be provided through a so-called turnkey supplier model, where the financing comes from, for example, pension companies.

“It will take major investments to rebuild the Danish navy, but Danish-built warships are certainly an option with pension funds behind them. The report mentions that there may be advantages in new forms of cooperation with the business community and with pension companies as a source of funding and partner. This model has already been used for the new patrol ships, which also include a pension company. Of course, this model can also be used when the entire fleet is to be expanded," Damsgaard added.

The report shows that the turnkey supplier model significantly reduces the procurement risk for the armed forces. At the same time, the turnkey supplier ensures collaboration to find innovative solutions in the ship project.

Therefore, the pension industry also hopes that the report will be well received by the Danish Parliament and the Defence Alliance.

“The pension industry manages around DKK 4,000bn of Danes' wealth, much of which is invested in Denmark. We make long-term investments on behalf of Danes. Therefore, we are also a solid and credible partner for the Danish armed forces," Damsgaard concluded.

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