Norges Bank Investment Management (NBIM) has announced that it will commit $1.5bn in Brookfield Asset Management’s Global Transition Fund II. For NBIM, which manages over $1.8tn on behalf of Norway’s Government Pension Fund Global, this marks its inaugural allocation to an energy transition fund.
"This agreement marks our first investment in an energy transition fund. BGTF II will enable us to invest in projects that develop renewable energy infrastructure while also supporting the broader transition to low-carbon solutions across industries", commented NBIM’s global head of energy and infrastructure, Harald von Heyden.
Mandate
The investment forms part of NBIM’s broader portfolio of investments in unlisted renewable energy infrastructure – a mandate the fund received from Norway’s Ministry of Finance in 2019.
Thus far, the mandate has led to eight direct allocations in European solar and wind energy assets in addition transmission and one indirect investment in a global renewable energy fund.
In August this year, when NBIM announced the fund’s half-year results, unlisted renewable energy was a top performer – returning 9.4%, compared to equity returns of 6.7% and fixed income returns of 3.3%. At last count, unlisted renewable infrastructure accounted for 0.4% of the fund’s asset allocation mix.
The fund
Brookfield’s BGTF II, a private market fund, is a successor of the first BGTF which raised $15bn back in 2022. BGTF I investments span a range of industries including renewable energy but also extending to carbon capture storage and utilisation (CCUS), ‘renewable natural gas’ and ‘nuclear services opportunities’.
Brookfield also operates Brookfield Renewable Partners, a publicly traded platform. In December 2023, Australian superannuation fund Australian Ethical divested from the platform citing concerns over the platform’s nuclear energy investments.
In February 2024, Brookfield announced first close for BGTF II at $10bn. At the time, BGTF II was co-headed by current Canadian Prime Minister Mark Carney.
According to a statement from NBIM, BGTF II is expected to invest in sustainable solutions, clean energy and business transformation across North and South America, Asia Pacific and Europe.
“After thorough due diligence on both investment and non-financial risks, we are confident in our selection of Brookfield as a partner for this important investment. Brookfield has established itself as a global leader in the energy transition space, managing one of the world's largest renewable energy portfolios”, added von Heyden.
