Ship

Financing of green infrastructure

It is important with an accelerated growth in building of green infrastructure for the maritime sector to succeed in the shift to carbon-neutral fuels. This includes all relevant infrastructure that supports the industry in the road towards zero emissions, such as production, distribution and bunkering of e.g., hydrogen, ammonia, biogas, and electricity. Innovative solutions such as offshore production, storage and bunkering of hydrogen can also be good relevant alternatives.

There are a range of development projects for use of low emission solutions in the maritime industry, and several analyses have been carried out with the aim to consider the need for such solutions in the years to come. Currently there are no overview over the need and hence potential for green, maritime infrastructure that cover all relevant technologies, solutions, and geographies in Norway – nor any combined overview over what kind of financial needs such infrastructure require. This bird’s eye perspective will be useful so that KLP and other actors in finance can work together with the industry and the public to develop financial solutions that will secure the speed in the green shift so that Norway will reach its political climate ambitions.

To identify financing solutions, it is important to understand the risk profile with the different technologies and the solutions that is a part of the future infrastructure. An understanding of the risk is creating a foundation to identify solutions for the sharing of risk between the actors, and then specially between the public and the private industry. KLP have experience with the public-private cooperation frameworks within renewable energy and high risk marked (e.g., such as solar cell industry in low development countries), and projects in Norway (e.g., road projects and financing of zero emission ferries. These forms of cooperation have not only succeeded in increase the private investment in countries with high need for clean energy. They have also contributed to the process for the public to reach their political targets, and this have been financially attractive for KLP. Our attitude is that it will be useful to learn from these forms of cooperation’s with focus on developing green, maritime infrastructure and financing in Norway. This will in the next round be an export product for those involved.

Goal of pilot project

We suggest a pilot project with the aim to establish new, effective finance solutions for green, maritime infrastructure in Norway for institutional investors (pension fund, mutual funds, and government investment fund, including banks).

The project is divided into two working packages:

Working package 1: Map and consider the need for green, maritime infrastructure in Norway. This working package will collect data and information around the need for green, maritime infrastructure in Norway. The working packages should include mature projects and plan projects with longer time horizons. Specific investment needs should be visualized in this phase. At the same time a consideration of the technical opportunities, barriers, and solutions for each project, at the same time an assessment of the business case and risk profile. Method and approach will be identified at project start in the working group. The working package will cooperate with other GSP pilots when needed, including working package 2.

Working package 2: Identify finance solutions that are relevant for institutional investors, opportunities for public-private cooperation and potential other cooperation forms. This working package is building on top of the deliveries from working package 1, and the main objective is to identify practical finance solutions that are relevant for institutional investors.

Status

The pilot started in September 2021.

Status March 2022: The first working package was approximately 70% complete.

Status October 2022: Both working packages are finalized.

The scope for working package 1 was to map and consider the need for green, maritime infrastructure in Norway. The results clearly indicate that significant investments will be necessary.
The scope for working package 2 was to identify finance solutions that are relevant for institutional investors, opportunities for public-private cooperation and potential other cooperation forms. The results for this phase will be presented in a final note.

The pilot study is expected to be completed within end of 2022.

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