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UPDATE 1-Norway oil fund may have to sell shares in up to 75 firms in coal ban
May 28, 2015 / 11:59 AM / 2 years ago

UPDATE 1-Norway oil fund may have to sell shares in up to 75 firms in coal ban

* Norway coal sales to affect up to $5 bln investment

* Plan won’t be a model for divestment from oil, gas

* Norway keeps its own state-run Arctic coal mines (Recasts, updates with quotes, reactions)

By Joachim Dagenborg and Alister Doyle

OSLO, May 28 (Reuters) - Norway’s $900 billion wealth fund may have to sell its stakes in up to 75 companies once new rules for limiting coal investments go into effect in a radical shift meant to lessen the impact of climate change, officials said on Thursday.

Parliament’s finance committee agreed a cross-party deal on Wednesday that the fund, which owns about 1.3 percent of listed companies globally, should sell stakes in firms that generate more than 30 percent of their output or revenues from coal-related activities.

Petter Johnsen, the fund’s chief investment officer for equities, estimated the deal would cover 50 to 75 companies.

Total Norwegian investments in the firms were worth 35 to 40 billion crowns ($4.51 billion to $5.15 billion), he told Reuters. “We will have to come back to the details of how it is implemented,” he said, declining to name any of the companies.

Environmental group Greenpeace predicted the fund would have to sell shares in European and U.S. power companies including Duke Energy Corp, RWE AG, American Electric Power Co Inc and Dominion Resources Inc.

“We’re focusing on mining and utility companies,” Torstein Tvedt Solberg, an opposition member of the finance committee in parliament, told Reuters. The fund has already sold out of some firms, especially coal miners.

Tvedt Solberg said he hoped the fund’s decision would set a “gold standard” for other funds considering divestment from coal, whose greenhouse gas pollution is blamed for stoking global warming.

The Church of England has been among funds limiting holdings in coal and tar sands.

The planned ban is due to be debated and voted by parliament on June 5. The government would then work out clear rules in a 2016 budget that will enter into force on Jan. 1, 2016.

Part of the Norwegian deal is that divestment from coal will not be a model for wider divestment, such as from oil and gas.

Some environmental groups say that investing the fund, built on oil and gas revenues, in fossil fuels makes no sense if the goal is to limit climate change risks.

And the Norwegian state itself owns coal mines on the Norwegian Arctic archipelago of Svalbard. “There is a lot of hypocrisy in all directions,” Truls Gulowsen of Greenpeace said.

Tvedt Solberg said keeping Arctic coal mines was about more than climate change. Jobs in the Arctic are part of a wider goal of geopolitical stability, helping limiting the influence of neighbouring Russia in the High North, he said. ($1 = 7.7607 Norwegian crowns) (Reporting by Joachim Dagenborg and Alister Doyle; Editing by Alison Williams)

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