Norway should make oil fund greener: minister

He said that clearer support for renewable energy and other green technologies by big sovereign wealth funds -- Norway alone owns about 1 percent of European equities -- could help stabilise the shares and encourage private investors.

“I personally am strongly in favour of such a development,” Solheim told Reuters of suggestions the fund should set aside cash for stocks, such as wind or solar power, that can help solve long-term environmental problems led by global warming.

“More people would look to these funds as a source of stability in the financial markets and a source for long-term investment in the future of humanity, like clean energy,” he said.

The financial crisis and stock market plunges were arguments in favour of more stable investments, especially in green technologies that might take decades to develop, he said.

Solheim, who is also minister of International Development, is a member of the Socialist Party, a junior partner in the three-party Labour-led coalition. The government is reviewing ethical guidelines for the fund, with conclusions due next year.

Formally known as the Government Pension Fund Global, the oil fund invests surplus revenues from oil and gas abroad with a guideline of 60 percent in equities and 40 percent to government bonds.

The fund grew to 2.12 trillion crown ($295.1 billion) in September from 2.02 trillion at the end of 2007, according to central bank figures. The fund has benefited from an inflow of oil and gas revenues despite tumbling stocks.

CLEAN ENERGY

Norway is the world’s number four oil exporter, but says it is committed to aiding a shift away from fossil fuels. Solheim did not say exactly how much should go to environmental stocks.

“Even if we start with a small percentage (of the fund), then we can gain experience,” he said.

He said that returns from environmental investments could sometimes be higher than from other sectors. “We would also look into how it could encourage more private investment,” he said.