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Danish pension funds support PPPs for infrastructure projects

15 May 2013

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Infrastructure projects in Denmark should be based on public-private partnerships (PPPs), a new report from Danish pension funds has revealed.

The report, which was set up by PensionDanmark in cooperation with ATP, PFA, PKA and Sampension, concluded that pension funds should be more involved in Denmark's infrastructure projects.

The report argued that there is a large potential for basing infrastructure projects, such as a harbour tunnel in Copenhagen, on PPPs and that with the right setup, PPPS can provide larger gains for society than infrastructure projects carried out by the public sector alone.

Former CEO of DONG Energy Anders Eldrup, who co-headed the working group with CEO of Nordea Bank Denmark Peter Schuetze which published the report, said that it was essential to have an efficient public-sector infrastructure and that cooperation between the public sector and private investors could help to achieve this goal.

"The report confirms that public-private partnerships have a large potential, as our¬†own projects based on this model have also shown, e.g. in connection with the¬†offshore wind farms at Anholt and Nysted," said PensionDanmark CEO Torben Möger Pedersen.

The report stated that the PPP model is best suited for infrastructure projects, in particular a harbour tunnel in Copenhagen, school construction projects and upgrading of the motorway from Naestved to Ronnede.

Möger Pedersen said: "We agree that society can reap considerable gains by carrying out large Danish infrastructure projects as PPPs – one reason being that this will improve the overall project funding. And as an investor I find these projects very interesting because they can provide a stable return for members many years ahead. So we are ready for more infrastructure investments via PPPs in the coming years."

He added: "If PPPs are really to take root in Denmark, there must be greater political will to apply this model. This report provides a thorough analysis of the PPP potential andshould be taken into account in the coming years when decisions are made on how to implement major Danish infrastructure projects."

First published 15.05.2013

monique_simpson@wilmington.co.uk