Australian Retirement Funds to Invest in UK Renewable Energy Assets

Solar panels on a roof in Albany, Western Australia, on Aug. 8, 2023. Susan Mortimer/The Epoch Times

Australian superannuation fund IFM Investors will pour $19 billion (US$12 billion) into renewable energy and infrastructure projects in the United Kingdom.

IFM Investors, a global investment manager owned by 17 Australian industry super funds, announced on Monday that it had committed to pump almost $6 billion into the large-scale infrastructure in the UK.

It also signed a new memorandum of understanding to establish policy priorities and the development of key infrastructure assets with the Department for Business and Trade of the UK Government at the Global Investment Summit 2023 in London.

Australia’s $3.5 trillion pension industry, also known as superannuation, has seen growing investment in overseas assets in recent years.

IFM Chief Executive David Neal said the partnerships were crucial to channel funding towards the transition to the low carbon economy.

He considered Australia’s superannuation funds system as a “trusted long-term partner with the United Kingdom.”

“Our presence in the UK continues to grow and we look forward to working closely with the government to drive investment into large-scale infrastructure and energy transition projects across equity and debt funding,” Mr. Neal said.

In a statement, Deepa Bharadwaj, head of Infrastructure Europe at IFM, said the UK is stepping up its investment in long-term infrastructure projects.

“We currently see significant deployment opportunities, particularly as part of the UK energy transition in areas such as offshore wind, solar, battery storage, renewable fuels, and pumped hydro,” he said.

Kemi Badenoc, UK Business and Trade Secretary, welcomed the move.

“This £10 billion commitment from IFM Investors is a very important investment for the UK’s innovative energy and infrastructure sectors,” he said.

“The increasing flows of new capital into our country, combined with the forthcoming Global Investment Summit, show how the UK is fast becoming the most exciting and innovative place in the world to invest.”

The IFM, which had some $217 billion (US$143 billion) in funds at the end of June, opened its first London in 2006 as the firm first embarked on a global expansion.

In a commentary, IFM Infrastructure Executive Director Albena Vassileva and Infrastructure Senior Advisor Mandeep Mundae said partnership in energy projects is important at a time when Europe is “grappling with a near-term shortage of energy sources and supplies” due to the Russia-Ukraine war.

“In this environment, security-linked energy initiatives are aimed at identifying reliable gas supplies from ‘friendly’ countries to reduce the dependence on Russian gas,” they said.

“Coined ‘friend-shoring,’ this is being achieved in the near term by building new pipelines and/or increasing LNG imports.”

They added that in the long-term, the entire energy system is expected to undergo a profound transition which will create many investment opportunities across the infrastructure asset class.

Aware Super To Invest In Energy Projects

Another large Australian super fund, Aware Super, also announced on Monday that it would inject more than £5 billion (A$9.5 billion) into the energy transition sector, affordable housing, life sciences, innovation, technology, and the digital infrastructure sector.

The $160 billion (US$102 billion) super fund announced in October it had invested approximately $2 billion (US$1.3 billion) into renewable energy assets.

With a focus on utility-scale wind and solar projects, Aware Super had already pumped $1.3 billion (US$860 million) in renewable energy projects.