Investing into renewable infrastructure is much bigger than just an ethical decision and "ticking the box exercise" for companies ESG Investment credentials. Instead, the economics of scale and growth in this evolving asset class resonates with institutional investors who are buoyed by long-term stable cash-flows, geographic diversification, low correlation to other asset classes and inflation hedging.
In a environment of political uncertainty and and heightened concerns for global capital market correction; surely this can only be a positive news for infrastructure investment....?
A new study among institutional investors, commissioned by Aquila Capital, reveals that average portfolio exposure to renewable infrastructure has risen to 3.6 per cent, up from 2 per cent in 2016. Over one in 10 institutional investors (12 per cent) who were surveyed now allocate between 10-15 per cent of their assets to renewable energy infrastructure. Rising allocations to renewable infrastructure are reflective of investors’ attitude towards the asset class – three-quarters (75 per cent) of investors said they were positive about the future of renewable infrastructure, an increase of 9 per cent on 2016, when the figure was 66 per cent. Between now and 2021, investors expect the biggest increases in their investment allocations will be made to offshore wind, solar thermal and onshore wind.