Norges Bank Investment Management, which manages the Government Pension Fund Global of Norway, or GPFG, named Aboitiz Power Corp. as the first Philippine energy company to be excluded from the list of companies that could avail of investments from the fund because of its exposure to coal-fired power plants.
Norges Bank decided to exclude 52 companies from the GPFG, after an assessment of the new product-based coal criterion. The exclusions follow a first round of analysis and further exclusions will follow in 2016.
“Where thermal coal is a significant part of a company’s business activities, the company may be excluded from the fund. The new criterion states that coal power companies and mining companies who themselves, or through other operations they control, base 30 percent or more of their activities on coal, and/or derive 30 percent of their revenues from coal, may be excluded from the GPFG. Coal in this case refers to thermal coal,” the bank said.
Norges Bank manages the GPFG, set up in 1990, on behalf of the Ministry of Finance, which owns the fund on behalf of the Norweigan people.
The capital from GPFG is being invested in a diversified mix that will give the highest returns within the guidelines set by the ministry.
Norges Bank announced their new investment criteria effective February 1, 2016. It excluded from its investment portfolio companies with more 30 percent revenue exposure to coal and mining.
Aboitiz Power was on the initial list of NBIM on April 14, 2016 but the power firm said the bank already divested its investments in the first quarter.
“There was no impact on company performance or share price at the time. AP will continue to engage with Norges Bank as its revenue mix changes given its pipeline of renewable energy projects and other investments,” it said.
Aboitiz Power said it remained committed to provide reliable and reasonably-priced power with the least possible adverse effects on its environment and host communities.
Aboitiz Power is currently one of the largest renewable energy providers in the Philippines with over 1,200 megawatts of hydro, geothermal, solar and biomass power. It also owns a coal plant in Davao and is building another one in Subic and Cebu. It holds a stake in the Pagbilao coal plant expansion project in Quezon and another in Misamis Oriental.
Aside from Aboitiz Power, 22 companies from the United States, seven each from China and India, three from Japan, two each from Chile, Canada, Hong Kong and Australia, and one each from the United Kingdom, South Africa, Poland and Greece were also excluded.
AES Corp. of the US owns a stake in the Masinloc coal-fired power plant in Zambales through AES Philippines.
“In the process of considering recommendations for exclusion or observation of companies that breach the thresholds above, emphasis should also be given to the forward looking product/fuel mix transition as well as the degree to which the company utilizes renewable energy in its activities,” the bank said.
Norges Bank said said power companies with 30 percent or more of their activities based on thermal coal would be covered.