Starting from 1 January 2000, the Norwegian Government Petroleum Fund may be invested in equities listed in Greece, Turkey, Brazil, Mexico, South Korea, Taiwan and Thailand in addition to the present 21 eligible markets. At the same time the Regulation for management of the Fund will be amended, formally establishing an Environmental Fund within the Petroleum Fund.

In the National Budget 2000, the Government stated that it would open for the investment of the Petroleum Fund in equities traded in emerging markets as from the year 2000. On the basis of a set of economic criteria, Greece, Turkey, Brazil, Mexico, South Korea, Taiwan and Thailand were regarded as the markets best suited. The Government has amended the Regulation for the management of the Petroleum Fund so as to include these markets in the Fund’s investment universe as from 1 January 2000. Only equity investments in the new markets are eligible at this time. Investments in fixed income securities in emerging markets will be considered later.

Investments in the new markets are limited to a maximum of 5 per cent of the total equity investments by the Fund. However, the Ministry of Finance has not yet included emerging markets in the Fund’s investment benchmark. The Ministry of Finance intends to finalise its evaluation of the benchmark portfolio by the end of the year 2000. It is unlikely that any investments will be made in the new markets before they are included in the benchmark portfolio.

The Environmental Fund

The Government also stated in the National Budget 2000 that it is to establish an Environmental Fund of NOK 1 bn within the Petroleum Fund in the course of the year 2000. The Regulation is now amended to reflect the establishment of the Environmental Fund. The Government is currently considering the precise guidelines for investment of this Fund. The intention is to present a detailed set-up in the Revised National Budget 2000.