Sweden’s KPA Pension, part of the Folksam Group, has invested SEK 2,100m in a fund focused on investing in the green transition.

It is part of an overall SEK 3bn investment made by the Folksam Group, made up of KPA Pension’s investment, and SEK 800m in Folksam Tjänstepension and SEK 100m in Konsumentkooperationens pensionsstiftelse.

The Copenhagen Infrastructure (CI) Growth Markets Fund II invests in onshore and offshore wind assets, solar parks and energy storage in more mature emerging markets and growing middle-income countries.

Emerging economies' demand for electricity is expected to increase 3-4 times by 2050. CI Growth Markets Fund II is expected to add 10 GW of green energy to the electricity grids and reduce over 10 million tonnes of carbon emissions per year.

Commenting, Folksam Group head of alternative investments, Rebecka Elkert, said: “The manager specialises in successfully developing large-scale renewable energy projects and in this fund focuses on emerging economies such as Chile and Vietnam, countries that are currently largely dependent on fossil fuel imports for their energy supply.

“This type of investment provides these economies with cheaper energy sources, and greater energy independence and each krona invested makes almost three times the difference in reduced carbon emissions compared to if the investment had been made in more developed markets. The investment diversifies the portfolio and helps to increase the expected return.”

The Folksam Group has had a relationship with Copenhagen Infrastructure Partners (CIP) since the investment in CI Infrastructure V, which was made in autumn 2023. CIP senior partner, Christina Grumstrup Sørensen, said: “We are grateful that the Folksam Group has chosen to expand its partnership with CIP by investing in Growth Markets Fund II.

“Developing large-scale renewable energy projects is particularly important in fast-growing middle-income countries where energy demand is high and cost-effective renewable technologies make a big difference. The Growth Markets Fund II is expected to add 10 GW of state-of-the-art green energy to the electricity grids, avoiding over 10 million tonnes of carbon emissions per year while promoting both local investment and job creation, and delivering an attractive risk-adjusted return to our investors.”

---