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Alternative Investments – The PensionDanmark Way
May 20, 2015 | OECD Green Investment Financing Forum | CEO Torben Möger Pedersen
1
Organisation and set up
PensionDanmark’s Set Up on Alternatives
› We have a strong preference for direct investments
› Expected return and duration of our preferred assets is not well-suited for
most traditional infrastructure and real estate funds
› Direct control is important – including control over time horizon and exit
› But we are aware of the pitfalls
› You need significant internal resources and expertise
› Being able to asses risk is key – don’t invest in anything you don’t
understand
› You should be prepared to walk away from a transaction after many months
of hard work
› Importance of strong teams
› Real Estate
› Infrastructure
› Credit
2
PensionDanmark will invest 10 pct. of assets in Energy Infrastructure Assets
Now owner of 2000MW of green power capacity
3
Examples
Direct infrastructure investments
4
Texas/PA, 2012
› Onshore wind, US
› Investment:
Undisclosed
Anholt, 2011
› Offshore wind, DK
› Investment:
EUR 500m
NGT, 2013
› Gas Transmission, NL
› Investment:
EUR 164m
Snetterton, 2013
› Biomass power plant, UK
› Investment: EUR 215m
DolWin 3, 2014
› Offshore grid connection for
North Sea wind farms, DE
› Investment: EUR 400m
Brite, 2015
› Biomass power plant, UK
› Investment: EUR 217m
Case: Biomass Power Plants
› Business rational
› Difficult for BWSC to gain orders without providing
project financing
› Inspired by set up with DONG on off shore wind
› First two projects:
› 2 x EUR 160m biomass power plants in UK
2 x 40-44MW
› Attractive and predictable return
› Limited construction risk (fixed price EPC with BWSC)
› Stable top line (PPA + qualifies for 1.5 ROCs)
› Fixed O&M contract with BWSC for lifetime of plant
› 12 year fixed price contracts with local suppliers of straw
› Capital structure provides further significant protection
to PensionDanmark
Joint Venture with Burmeister & Wain Scandinavian Contractor (85/15)
5
Thank you
CEO Torben Möger Pedersen | tmp@pension.dk

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2015 05-20 - oecd green investment financing forum session 9 institutional investor roundtable on sustainable energy financing

  • 1. Alternative Investments – The PensionDanmark Way May 20, 2015 | OECD Green Investment Financing Forum | CEO Torben Möger Pedersen 1
  • 2. Organisation and set up PensionDanmark’s Set Up on Alternatives › We have a strong preference for direct investments › Expected return and duration of our preferred assets is not well-suited for most traditional infrastructure and real estate funds › Direct control is important – including control over time horizon and exit › But we are aware of the pitfalls › You need significant internal resources and expertise › Being able to asses risk is key – don’t invest in anything you don’t understand › You should be prepared to walk away from a transaction after many months of hard work › Importance of strong teams › Real Estate › Infrastructure › Credit 2
  • 3. PensionDanmark will invest 10 pct. of assets in Energy Infrastructure Assets Now owner of 2000MW of green power capacity 3
  • 4. Examples Direct infrastructure investments 4 Texas/PA, 2012 › Onshore wind, US › Investment: Undisclosed Anholt, 2011 › Offshore wind, DK › Investment: EUR 500m NGT, 2013 › Gas Transmission, NL › Investment: EUR 164m Snetterton, 2013 › Biomass power plant, UK › Investment: EUR 215m DolWin 3, 2014 › Offshore grid connection for North Sea wind farms, DE › Investment: EUR 400m Brite, 2015 › Biomass power plant, UK › Investment: EUR 217m
  • 5. Case: Biomass Power Plants › Business rational › Difficult for BWSC to gain orders without providing project financing › Inspired by set up with DONG on off shore wind › First two projects: › 2 x EUR 160m biomass power plants in UK 2 x 40-44MW › Attractive and predictable return › Limited construction risk (fixed price EPC with BWSC) › Stable top line (PPA + qualifies for 1.5 ROCs) › Fixed O&M contract with BWSC for lifetime of plant › 12 year fixed price contracts with local suppliers of straw › Capital structure provides further significant protection to PensionDanmark Joint Venture with Burmeister & Wain Scandinavian Contractor (85/15) 5
  • 6. Thank you CEO Torben Möger Pedersen | tmp@pension.dk