Platform investments have long been a preferred way for many investors to deploy capital in certain jurisdictions or subsectors – but 2023 really saw this structure take off for renewable energy in the Asia-Pacific region.
There was a string of investments that closed or were announced along these lines over the past 12 months, often in markets that haven’t seen a great deal of interest from institutional investors in years gone by.
CDPQ’s first direct infrastructure investment in Japan, a commitment of ¥70 billion ($488 million; €446 million) to renewable energy developer Shizen Energy, was a sign of things to come at the back end of 2022, giving the Canadian investor a foothold in a new market through a significant platform.
Actis did a similar deal in May 2023, acquiring 100 percent of Hergo Japan Energy Corporation to seed its new Japanese onshore renewables platform, Nozomi Energy. The firm has ambitions to invest up to $500 million of equity into projects through that platform over the next four to five years, with the initial investment made from its latest energy infrastructure fund, Actis Energy 5.
Outside Japan, I Squared Capital made what was billed as one of the largest investments of its type into Southeast Asia infrastructure when its portfolio company HEXA Renewables signed a memorandum of understanding to develop up to 1GW of hybrid solar photovoltaic projects in southern Malaysia.
Sticking with Southeast Asia, BlackRock continued its march across the region with its first investment in renewable energy in Thailand, using capital from its Climate Finance Partnership to form a platform with Thai renewables operator and develop Chow Energy. BlackRock’s capital will be used to help Chow hit a target of building out its pipeline of more than 1GW of greenfield commercial and industrial solar capacity.
BlackRock also made a splash in August with the announcement of a NZ$2 billion ($1.3 billion; €1.1 billion) closed-end fund in New Zealand that it said was its largest single-market, climate-focused infrastructure strategy. News has been quiet on this front since, but it was a sign of intent.
And the powerhouse for institutional investment in renewables, Australia, was not to be ignored either. The Australian government announced a Capacity Investment Scheme that should prove tempting to many investors over the coming years, with BlackRock among those that look set to potentially benefit.
Another is Macquarie Asset Management, which announced the launch of its own A$10 billion ($6.8 billion; €6.1 billion) Australia-focused platform, Aula Energy, at around the same time as the government’s CIS announcement. Even if this was just a coincidence, it leaves MAM well-positioned to take advantage of whatever opportunities might arise.
These are just a selection of the most high-profile recent platform launches, with others like KKR, Brookfield Asset Management, Morrison, and Igneo Infrastructure Partners all active with their own investments.
The energy transition remains a potent investment thematic in all markets – but especially so in APAC, where economic growth and demographic shifts make the tailwinds even more attractive.