The Norwegian government has once more rejected the idea of including unlisted infrastructure investments in the Government Pension Fund Global (GPFG).

The country’s finance ministry has also said the NOK7.9bn (€861bn) sovereign wealth fund should not divest from oil and gas stocks, as it would not reduce the fund’s exposure to related risks.

In a white paper on the management of the fund in 2016 – released at the end of last month and due to be voted on in parliament in May – the finance ministry also proposed increasing the strategic equity allocation of the fund to 70% from 62.5% currently, as it announced in February.

Siv Jensen, minister of finance, said: “A higher equity share requires broad political consensus, as well as the ability to remain committed to the investment strategy, also when the fund fluctuates in value.”

At the end of March, the fund reported an equity allocation of 64.6%, having risen from 62.5% at the end of December.

“Divestment of the oil and gas equity holdings of the fund is a digression, and makes us no less vulnerable to a permanent decline in petroleum revenues.”

- Siv Jensen, finance minister

Yngve Slyngstad, chief executive of Norges Bank Investment Management (NBIM) which manages the fund, said at the end of February that if allocation were increased to 70% in its the mandate, NBIM was unlikely to go on an immediate share-buying spree but would rather wait until it found a good moment to buy.

Releasing the white paper, Jensen said the government was not proposing to allow the GPFG to make investments in unlisted infrastructure at this time.

“Whether the Government Pension Fund Global should be permitted to invest in unlisted infrastructure investments is not a climate issue, but foremost a question of which risks the fund should be exposed to,” she said. “A transparent and politically endorsed sovereign fund like ours is not well suited to carry the particular risks posed by such investments, compared to other investors.”

The ministry also rejected the idea that the GPFG should divest from oil and gas stocks.

Jensen said that making the Norwegian economy less dependent on oil and more responsive to change had been one of the government’s main aims.

“First and foremost, this requires a qualified labour force and a productive business sector,” she said. “Divestment of the oil and gas equity holdings of the fund is a digression, and makes us no less vulnerable to a permanent decline in petroleum revenues.”

The ministry said it was also proposing that the fund’s mandate be amended to require Norges Bank’s executive board to approve each state issues government bonds, in addition to a requirement that it reports on procedures and systems for such approval.


It noted that in 2015, the Storting’s (parliament) Standing Committee on Finance and Economic Affairs had requested guidelines to be considered for the GPFG as a tool in its assessment of financial risk.

“The GPFG has a good framework for handling the financial risk associated with government bond investments,” Jensen said. “This is strengthened further by the proposed changes.”

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