Germany launches new SWF

Published on the: 2017-08-30 13:45:02

Germany, of all unlikely contributors, has just added a new sovereign wealth fund
to the global investor community — albeit one with an unprecedented mandate
and funding model.

On December 15, 2016, the German Bundestag, the national Parliament, passed
legislation for the reallocation of responsibilities for nuclear waste disposal,
effectively creating a sovereign fund to address the future costs of safely
disposing of radioactive materials generated by commercial nuclear energy
production. The legislation came into effect last month, on June 16. At its core is
a new investment vehicle, known as the “Fonds zur Finanzierung der
kerntechnischen Entsorgung,” best translated as the Nuclear Waste Disposal
Fund (NWDF).

On July 3, the NWDF received €23.6 billion in cash from four energy companies
that operate or hold stakes in nuclear power plants in Germany: EnBW, E.ON,
RWE, and Vattenfall, as well as a public-services utility owned by the city of
Munich, Stadtwerke München. In one brisk manoeuver, the companies have
effectively offloaded their financial liabilities for the safe disposal and
management of nuclear waste resulting from electricity generation at German
nuclear power plants to the NWDF. The fund is, or should be, ready to start
investing soon.

Show attached file