Oslo orders sweeping review of its sovereign wealth fund’s Israeli holdings after revelations of increased investments in a company servicing IDF fighter jets.
Norway’s government announced Tuesday it will scrutinize its $1.9 trillion sovereign wealth fund to determine whether Israeli companies linked to the Gaza conflict or activities in Judea and Samaria should be excluded from investment.
The move follows an exposé by Norwegian daily Aftenposten, which revealed the fund had boosted its stake in Bet Shemesh Engines Ltd. (BSEL) — a key supplier servicing Israel Defense Forces fighter jets. The report ignited political and public debate in Oslo over whether such holdings violate the fund’s ethical mandate.
Prime Minister Jonas Gahr Stoere voiced his unease:
“We must get clarification on this because reading about it makes me uneasy,” he told Norway’s NRK broadcaster.
According to Norges Bank Investment Management (NBIM) — which oversees the fund — the sovereign wealth giant acquired a 1.3% stake in BSEL in 2023 and increased it to 2.09% by the end of 2024, amounting to $15.2 million in shares.
Finance Minister Jens Stoltenberg confirmed the central bank will now examine all Israeli holdings, citing both the media revelations and the volatile security situation in the Middle East.
NBIM CEO Nicolai Tangen stressed that BSEL does not appear on any exclusion lists maintained by the UN or the fund’s own ethics council. Still, Norway’s parliament — which rejected a full divestment motion in June — has already blacklisted 11 companies accused of assisting Israel’s “occupation,” most recently the petrol station chain Paz and telecom giant Bezeq.
As of late 2024, Norway’s wealth fund had $2 billion invested in 65 Israeli companies, representing 0.1% of its portfolio.
The development comes amid Norway’s increasingly assertive role in the Israeli-Palestinian conflict. In May, Norway joined Ireland and Spain in declaring its intent to recognize a Palestinian state, framing the move as a step toward a two-state solution.
Whether the review will lead to the divestment of defense-linked Israeli companies remains a politically charged question — one with implications for both Oslo’s foreign policy and its investment strategy.
