PAG steps up infra focus with Asia renewables platform launch

APAC-focused investment firm PAG has doubled down on its infrastructure strategy with the launch of PAG Renewables, a company wholly owned by the firm that intends to invest over $1 billion in renewable energy projects across Asia.

The launch follows the firm’s recent acquisition of Japan-based solar development company First Solar. The latter’s development and operations team will form the core of PAG Renewables, which will be responsible for PAG’s renewables portfolio moving forward.

According to PAG Renewables’ chief executive James Buford, Japan will remain core to the platform’s strategy going forward, with it also aiming to target developed APAC markets including Taiwan, South Korea and Australia.

“Demand for renewables growth [in Japan] remains critical. Government targets require roughly a doubling of renewable capacity by 2030 and corporate offtake will drive the next phase of growth,” Buford told Infrastructure Investor.

“Japan is second only to the US in terms of the number of domestic companies that have committed to source 100 percent of their energy needs from renewable energy. Looking at that demand alone, it equates to more than 50GW of potential need.

“Beyond Japan, our targets are generally developed economies underpinned by strong government support and underlying fundamentals.”

Given the track record of PAG Renewables’ core team, solar energy will be its initial focus. The company does, however, intend to explore opportunities throughout the renewable energy landscape in order to meet different needs across Asian markets over time.

An increasing infra focus

PAG’s real assets arm, which has historically focused on the real estate space, also recently branched out into digital infrastructure with the November 2021 launch of FLOW Digital Infrastructure. The company – which recently partnered with Manila-headquartered real estate developer AyalaLand Logistics to enter into a framework agreement for data centre development in the Philippines – plans to invest upwards of $10 billion into digital infrastructure across the APAC region.

“Over the coming years, we expect the APAC digital infrastructure market to continue growing at approximately 9 percent CAGR, the fastest-growing region in the world,” PAG group president Jon-Paul Toppino told Infrastructure Investor. “This is being driven by the growth of 5G as well as needed upgrades to digital networks in many countries in the region. We are focusing our investment in areas that play into this theme: hyperscale and edge data centres, fibre networks and undersea cable landing stations, to name a few.

“The PAG Renewables platform, like FLOW Digital Infrastructure, will allow PAG to capture the increasingly attractive opportunities we are seeing in the infrastructure space. There is significant runway for growth in these industries, and we see PAG at the forefront of that expansion.”