Strathclyde Pension Fund has made its biggest ever investment in UK green infrastructure by putting £50m into offshore wind farms via the government-backed Green Investment Bank (GIB).
It is the first time the £14bn Scottish local government pension fund has invested in the country's offshore wind sector, which it has done through the bank's dedicated fund.
The fund, which is now the biggest renewable energy fund in the UK at £818m, has also attracted investment from Swedish pensions company AMF Pensionsförsäkring. Strathclyde and AMF were both investors in the second close of the fund, bringing in £355m in total.
Strathclyde Pension Fund chair, councillor Paul Rooney said: "This is our biggest investment to date in green infrastructure in the UK.
"Our fund was already working closely with the Green Investment Bank to provide finance for community-scale renewable energy projects and we are excited to follow that project by taking a stake in a long-term and globally significant investment in offshore wind power.
"We are confident it is one that will deliver not only sustainable and secure energy infrastructure for the future of our communities, but a sustainable and secure future for our members who are saving for retirement."
Strathclyde invested £10m in Albion Community Power earlier this year alongside the GIB and Greater Manchester Pension Fund which committed £50m and £10m respectively.
The size of Strathclyde‘s investment in the GIB's fund is noted in the pension committee meeting minutes, but AMF has committed the lion's share of the new commitments.
A European-based non-profit organisation also invested a comparatively small amount in the fund's second close. The fund reached its first close of £463m earlier this year having attracted investments from two unnamed public sector funds and a sovereign wealth fund.
AMF chief investment officer Peder Hasslev said his company which has around SEK 550 billion (£44.4bn) in assets is attracted to opportunities where responsible investments and good returns go hand-in-hand, and that UK green infrastructure fulfils both. Like Strathclyde, this is AMF's first investment in UK offshore wind farms.
Energy and climate change secretary Amber Rudd said: "Offshore wind has been a UK success story and I welcome this long-term, private sector involvement in what is now the largest renewable energy fund in the UK. This demonstrates how we are open for business and the best place in the world to invest in offshore wind."
The bank also said it was in "advanced discussions" with other potential investors and progressing quickly towards final close and reaching its £1bn target.
Several offshore wind farm projects have been dropped in recent years due to problems with funding and development. The UK's biggest developer Dong Energy has criticised the government's failure to spell out its future policy from 2020 on offshore wind power.
It comes as the chancellor announced last week that the Local Government Pension Scheme (LGPS) will be pooled into six British wealth funds with a view to invest in UK infrastructure. Strathclyde will not have to do this as it is part of the Scottish LGPS.
The government will set up an infrastructure bank to support investment and to co-invest alongside investors including pension funds.
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