1. RENEWABLE ENERGY Funding the transition Idar Kreutzer, CEO Finance Norway INTPOW September 22 2015

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3. Risk management - when risks collide 3

4. Transition require significant investment 4 In the next 15 years… Source: Better growth, Better Climate – The New Climate Economy Report

5. 5 Structuring of projects Equity Bond market Bank loan Rating requirements Ownership model Duration Stable cash flows Proximity to cash flows Liquidity Important to establish a good dealogue with the funding source early in the project An optimal structure requires taking into account the funding source's needs:

6. 6 Financing Norwegian Industry  Profitable and solid banks  Partner for all parts of Norwegian industry Ex: DNB engagements as of 30.06.2015 Foto: Mona Beate Odland Kilde: DNB. Exposures at default, excl. credit inst. exposures Lav risiko 59% Middels 37% Høy

7. The largest institutional investors 7 Source: ”Funding the future”, Oliver Wyman, 2013

8. 8 Limited investments in infrastructure Source: ”Funding the future”, Oliver Wyman, 2013

9. Liability driven investments Valuing liabilities – and matching the duration If the liabilities' duration is 15, then a 2 percentage points fall in interest rates alters the present value of liabilities with 30% if this change is simply carried through for the purpose of liability valuation Which assets (apart from too few long dated bonds) yield 30% with certainty over 4 months? 2 % point fall in rates Assets 100 Liabilities 100 Liabilities 130 Assets 100 30% increase in liabilities Example: duration 15 Source: Bloomberg 20 yrs swap ? 9

10. The responsible investment framework

11. 1.Risk Risk of losses, stranded assets, customer loss, and reputation damage 2.Matching opportunities Long term pension funds match long term infrastructure investments 3.New winners Everyone want to find tomorrows winners. 11 Financial drivers for green growth

12. We can do better 12 Strategy for green competitiveness What characterizes proactive and growth-oriented policies for a green competitiveness? Foto: Mikaela Berg, hentet fra DN.no

13. 13 Financing is key to a successful transition Will require significant public and private investments Green bonds is growing in importance Better understanding of risk and asset allocation logic, will maximise private sector multiplier on public investments

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