Oireachtas Joint and Select Committees

Wednesday, 31 May 2023

Committee on Budgetary Oversight

Sovereign Wealth Funds: Discussion (Resumed)

Mr. Svein Gjedrem:

The oil income will run out at some stage. Looking at the climate, we hope that the demand and need for oil and gas might come down sooner rather than later. Nevertheless, looking at how things go, it will probably last another generation with income from the oil sector. That is one part of it. We do not spend the capital in the fund. If you have a bank account and you have saved a lot of money in it, and you only spend the real interest that you own, then your bank account can be transferred to the next generation. That is the way. We look at this as a saving; we do not spend the capital, only the real return. It is like transferring something to the next generation. At one stage, it will not increase any more because we will have spent all of the return and then the oil income will stop and the fund will stop increasing. Then we will only have the returns.