The Federal government’s Clean Energy Finance Corporation is to invest $150 million with IFM’s $12 billion Australian Infrastructure Fund in a move that will reduce carbon emissions from its infrastructure portfolio.
The move is the first time the CEFC has invested in such a fund and it will target emissions reduction and energy efficiency initiatives across assets including power network Ausgrid, Brisbane Airport, Melbourne Airport, Sydney’s Port Botany and the Port of Brisbane.
“Infrastructure assets are central to our economic and social well-being. They are usually large, expensive and built for the long term. It is absolutely critical that the assets of today contribute to the overall emissions reduction task that we are facing,” said CEFC CEO Ian Learmonth.
“With this investment the CEFC will work with IFM Investors in targeting comprehensive and sustained improvements to the carbon footprint of some of our most important infrastructure assets. We will also work with IFM Investors to enhance benchmarks and transparency around infrastructure emissions, so that we can deliver a step change in the emissions profile of our national infrastructure.”
IFM Investors is an umbrella investment group owned by 27 of Australia’s industry superannuation funds. It invests for six million Australian workers and around nine million members in offshore pension funds.
Kyle Mangini, IFM Investors Global Head of Infrastructure said: “IFM is a leader in sustainable investment. With the support of the CEFC, we will accelerate our program of measuring, reporting, and decreasing emissions from Australian infrastructure assets.
“The fact that this is the first commitment by the CEFC to an infrastructure fund reflects our alignment in a cleaner future. Today, I invite other investors in infrastructure to follow our lead and make a difference.”
According to Australia’s National Greenhouse Gas Inventory, infrastructure-related emissions account for more than half Australia’s total greenhouse gas emissions, mainly from the electricity sector (35 per cent) and the transport sector (18 per cent).
CEFC estimates show that a 5 per cent improvement across the IFM infrastructure portfolio would abate almost 69,000 tonnes of CO2-e annually. This is equivalent to removing 14,775 cars from the road each year, or providing electricity to about 7,450 homes a year.
CEFC infrastructure lead Julia Hinwood said emissions reduction initiatives to be employed could include installing on-site solar PV and battery storage and converting vehicle fleets from petrol and diesel to electric. Other planned measures include smart management systems which monitor asset performance to help reduce energy consumption and optimise logistics and supply chains.
As a condition of CEFC commitment, IFM Investors must benchmark energy and emissions intensity for each of its top five assets and identify pathways to energy and emissions reductions that reflect best practice in the sector class.
This equity investment builds on the CEFC’s portfolio of infrastructure development which includes a $150 million in debt finance deal with Moorebank Logistics Park intermodal terminal in south- western Sydney. The CEFC is also a leading investor in energy-related infrastructure, financing innovative large-scale solar, wind and energy storage developments Australia-wide.
CEFC finance for infrastructure projects is part of its Sustainable Cities Investment Program, which is aiming to invest $1 billion into clean energy initiatives in Australian cities over 10 years.