Infrastructure investors have little appetite for fossil fuels

Moree Solar Farm
Moree Solar Farm

Non-renewable energy projects are one of the least attractive infrastructure in Australia for investors, a new report has found.

But while investors are staying away from coal and gas in droves, 50 per cent of those surveyed want to back renewable energy, up from 36 per cent last year.

The 2016 Australian Infrastructure Investment Report, released by Infrastructure Partnerships Australia and financial services group Perpetual, showed that roads were still the most attractive option for 70 per cent of investors, followed closely by social infrastructure such as schools and hospitals at 65 per cent. Water infrastructure is also popular with 50 per cent of investors.

The report attributes the surge in interest in renewable energy projects as being driven by renewed certainty around the Renewable Energy Target.

The researchers surveyed 20 global and domestic investors, including sovereign wealth funds, pension funds, fund managers, developers, banks and insurance companies managing a total of over $110 billion in worldwide infrastructure investments.

Fifty per cent said they were looking offshore for opportunities due to the low number of projects available within Australia.

Certainty was identified as critical, and investors also said there needed to be a more visible investment pipeline.

“Our research shows a very strong preference for NSW and Victorian infrastructure, over the on-and-off-again projects and privatisations offered by the resource states,” IPA chief executive Brendan Lyon said.

“This report shows that Australia’s got the type of problem everyone wants: too many investors wanting to put money into infrastructure, right at the time we need more investment.”

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