The Government Pension Fund Global's investments in Russia

The Ministry of Finance writes in letter 28 February 2022 that all investments in the Government Pension Fund Global (GPFG) in financial instruments issued by Russian companies, the Russian state or entities linked to the Russian state were to be frozen with immediate effect and until further notice. The Ministry also decided that the fund's investment universe was no longer to include Russia. In the letter the Ministry asks Norges Bank to prepare a draft plan for selling off the GPFG's investments in Russia, including timings for adjustment of the benchmark index and changes to the investment universe.

At the end of 2021, the fund's equity investments in Russia had a value of around 27 billion kroner. The Moscow stock exchange has been closed since 28 February 2022. In addition, extensive sanctions have been imposed. Since it is not possible to carry out transactions in the Russian stock market, Russia was removed from all of FTSE Russell's indices at a price approximately equal to zero from 7 March 2022. Russia was also excluded from the fund's benchmark index from the same date.

Norges Bank will sell all of the fund's investments in Russia in line with the Ministry's decision. Owing to closed markets and extensive sanctions, it is not possible to commence the sale at present. Norges Bank will return to the Ministry with a recommendation on the lifting of the freeze on our investments in Russia once markets are functioning more normally. We will then make more detailed recommendations on the implementation of the sale based on applicable sanctions and the fund's interests more generally. The divestment will have to take place over time.

The situation is very uncertain. Further details can be found in the enclosure, including proposals for specific adjustments to the management mandate to reflect the removal of Russia from the fund's investment universe.

Yours faithfully                                                                                           

Ida Wolden Bache                                                     Nicolai Tangen

Enclosure (exempt from public disclosure)