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Keva's climate eye turns inward with green power deal for full real estate portfolio

A partnership among Finnish pension group Keva and Norwegian power company Statkraft will ensure predictably priced renewable power for the latter's residential and commercial real estate assets for a ten-year period.

Photo: Statkraft / Ole Martin Wold

It's one thing for money managers to screen potential investment targets for carbon emissions profiles and other criteria tied to social and environmental conscience, however, some things can be accomplished even more directly and with a range of associated benefits.

In an effort to combine its climate ambitions with longer-term cost visibility, Finnish pension fund Keva, a Climate Action 100+ member and no newcomer to advocacy through investment, now enters a so-called power purchase agreement (PPA) meant to guarantee carbon-neutral electricity for all the pension firm's holdings of residential and commercial real estate for a ten-year period, Keva writes in press statement.

In the world of energy, PPAs, with their firm prices for a fixed period, are a popular method for developers to ensure earnings visibility over a period of years and thereby have tangible, contractual figures to show financiers when seeking credit for projects. Such deals are also widely seen as the clearest pathway for renewables to shed the training wheels of state subsidization.

This agreement will help Keva achieve its net carbon-neutrality target for in-house electricity consumption by 2030 – not to mention securing price certainty on renewable power for its properties.

"Through the agreement now signed, we want to support the construction of new renewable electricity production in Finland and not just buy a share of existing production. This is why one of the key terms and conditions in the agreement was building new electricity production in Finland," writes Tuomas Helin, environmental manager at Keva's property asset unit, in a press statement, continuing:

"Where necessary, we will continue to acquire guarantees of origin for renewable energy, increase the amount of on-site production of renewable energy at our property assets and pursue opportunities for new similar power purchase agreements.”

The deal will also also help establish development of a new onshore wind farm in the North Ostrobothnia region in a move that will also boost Finland's renewable energy capacity.

The new wind facility is set to commission in 2022.

Keva has committed itself to purchase a volume of wind power from the installation sufficient for covering 70 percent of the pension firm's current electricity usage across its real estate assets.

English Edit: Daniel Frank Christensen

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