OSLO: Norway has many sources to tap as policy makers seek to wean the nation off its oil reliance.
Besides its $850 billion sovereign wealth fund, Norway’s State Educational Loan Fund, which provides loans to students domestically and abroad and some international students in Norway, is prepared to serve as a buffer amid deepening economic strains, according to Chief Executive Officer Marianne Andreassen.
“With a damping of the oil sector engine and the huge investments there, many who worked in those areas will need to work elsewhere,” Andreassen said in an interview.
Western Europe’s biggest crude producer is facing what central bank Governor Oeystein Olsen calls a “period of restructuring” amid plunging oil prices. A 53 percent drop in Brent since a June high is endangering an economy that relies on oil and gas for more than one-fifth of its output. Oil and gas companies operating in Norway are estimating they will cut investments by about 12 percent this year, according to a quarterly survey of companies by Statistics Norway.
The State Educational Loan Fund paid out 24.2 billion kroner ($2.9 billion) in the latest study year and has 146.8 billion kroner in loans outstanding. The fund is directly financed in the national budget at repayment interest rates currently set at a record low of about 2 percent.
The Education Ministry predicts a 7 percent increase in the number of students by 2020, which would mean a corresponding growth in loans.
Making a profit doesn’t enter into their calculations.
