Norwegian state injects NOK 500m into VC fund

The commitment, which is included in the revised national budget and will come into effect in June, is earmarked for investments in the Norwegian forest industry.

Investinor director Geir Ove Kjesbu views this is an opportunity to build up competence in the sector. "The forest industry is a totally new market for Investinor, and before we start investing we need to build up our knowledge on which market segments are the most buoyant, what technologies will break through within the next 10 years, who are potential co-investors, to whom can such investments be sold, and what IRR we can expect," says Kjesbu.

The Norwegian forest industry has struggled recently with low profitability, and many factories have been forced to shut down. Among them is Södra, which liquidated its ownership of Södra Cell Tofte in February.

"Forestry is not a typical investment sector for Norwegian private equity; it is more or less a blue ocean for such investors, including Investinor. The government has no expectations on us to provide support; we will invest for commercial purposes," says press officer Rune Saevik. "It will take some time before Investinor can enter this market due to our lack of know-how," he continues.

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• Norway