Image: Port of MelbourneSome of Australia’s most important infrastructure assets, including Port of Melbourne and Sydney Airport, have signed on to the final stage of the highly successful Australian Infrastructure Renewable Energy Program led by QIC and IFM Investors - two of Australia’s largest infrastructure fund managers1.
The program, valued at over A$700million, will facilitate the supply of 500GWh of renewable energy per annum once all the assets roll onto the program2. They will aim to help Australia’s critical infrastructure businesses in QIC and IFM’s portfolios save costs, reduce exposure to energy market volatility and cut emissions.
Launched in March 2022, Stage 1 of the program included seven critical infrastructure assets across New South Wales and Victoria - NorthWestern Roads Group’s WestLink M7, Transurban’s CityLink, Nexus Hospitals, Melbourne Airport, NSW Ports, Southern Cross Station and Ausgrid.
In November 2022, Brisbane Airport Corporation signed on for Stage 2 of the program.
Announced today, Stage 3 will see additional infrastructure assets sign on to the program, bringing the total size of the program to over 500 GWh per annum at its peak.
The assets signing as part of Stages 3 include:
- Port of Melbourne
- Lochard Energy
- Nexus Hospital
- Healius Limited
- Sydney Airport
- Adelaide Airport
- PRP Diagnostic Imaging
The energy suppliers for Stage 3 are Iberdrola and Squadron Energy, joining Origin Energy and Stanwell as suppliers to the assets who joined the program in Stages 1 and 2.
The multiple deals were structured by CORE Markets, an independent renewable energy, markets and sustainability advisory firm.
By 2025, the entire three-stage program is expected to save around 235,000 tonnes of CO2 annually. That is estimated to be the equivalent of reducing the carbon footprint of every home in a regional town the size of Ballarat in Victoria, or Toowoomba in Queensland, to zero.
The demand for renewable energy created by the program could also pave the way for further investment in renewable projects, helping to accelerate the greening of Australia’s energy grid and supporting the creation of hundreds of new jobs.
Demonstrating the success of the program, this Stage 3 group will surpass Stage 1 as the largest contracted load (in aggregate), as part of the largest multi-asset, multi-state PPA in Australia. It is also the first consortium to sign for green rights beyond 2030.
Six participating assets have net zero Scope 1 and 2 targets 2030 or before. These assets have made significant progress towards their net zero targets for Scope 1 and 2 emissions through a combination of participation in this program, as well as other sustainability initiatives such as constructing behind the meter solar farms, installing energy efficient lighting and using electric vehicles.
The program will also assist in reducing Scope 3 emissions. The structure of the PPAs has allowed assets to become approved renewable energy providers, meaning that on-site businesses, partners and retailers can choose that asset as their electricity supplier and renewable power provider For example, Melbourne Airport is the first airport in Australia to become an accredited GreenPower provider.
These net zero commitments also contribute to QIC and IFM’s own net zero targets, including the 2030 interim emission reduction targets for infrastructure announced by each company in 2022.
QIC and IFM Investors collectively manage over A$140 billion3 worth of infrastructure assets globally.
Quote attributable to Ross Israel, QIC Head of Global Infrastructure:
“Through this important renewable energy program, we are contributing to the net zero ambitions of some of Australia’s most significant infrastructure assets, while also reducing our assets’ exposure to energy market volatility and delivering cost-savings through renewable energy.”
“The renewable PPA is aligned to QIC’s decarbonisation investment thematic, where private capital will continue to play a critical role in funding pathways to achieve net zero targets alongside governments. This thematic has seen us grow our infrastructure platform to include some A$9.5 billion in investments supporting the transition to a low carbon economy, as we seek to mitigate the risks of climate change on our investors’ portfolios.”
Quote attributable to Michael Hanna, IFM Investors Head of Infrastructure Australia:
“Generating long-term returns for our investors and the working Australians they represent means managing and mitigating the risks posed by climate change.”
“This significant renewable energy purchasing program marks an important step for IFM’s assets and our own commitment to target net zero emissions. Importantly, it provides a blueprint to help more infrastructure assets switch to renewable energy and accelerate the sector’s emission reduction efforts.”
Quote attributable to Chris Halliwell, CEO CORE Markets:
“Congratulations to QIC and IFM. Not only for their climate leadership, but also for setting an example in renewable energy contract innovation. The multiple deals involved many moving parts and large aggregation volumes. They resulted in significant emission reductions with favourable commercial outcomes for each entity.”
Citations
- By funds under management.
- Source: CORE Markets.
- As at 31 December 2023.
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Further information
QIC is a long-term specialist manager in alternatives offering infrastructure, real estate, private capital, liquid strategies and multi-asset investments. It is one of the largest institutional investment managers in Australia, with A$106bn (US$72.5bn) in funds under management. QIC has over 900 employees and serves approximately 115 clients. Headquartered in Brisbane, Australia, QIC also has offices in Sydney, Melbourne, New York, San Francisco and London. For more information, please visit: www.qic.com (as at 31 December 2023).
QIC is a long-term infrastructure investor with an established international platform, an active management approach and a proven 17-year track record. With an international team of 87 professionals across five offices, QIC Infrastructure manages A$32.8bn (US$22.4bn) across 22 international direct investments and has realised in excess of A$15.2bn back to its clients. QIC has managed A$7.1bn in Australian energy assets since 2007 across the energy value chain (as at 31 December 2023).
IFM Investors was established more than 25 years ago with the aim to protect and grow the long-term retirement savings of working people. Owned by a group of Australian pension funds, the organisation has £117 billion under management as at 31 March 2023. Because IFM is owned by industry pension funds, we prioritise the interests of 600 like-minded investors worldwide by focusing on assets that combine excellent long-term risk/reward characteristics with broad economic and social benefits to the community. As a signatory to The United Nations supported Principles for Responsible Investment, IFM actively engages on ESG issues with the companies in which we invest with the aim of enhancing their net performance while minimising investment risk. Operating globally from offices in Melbourne, Sydney, London, Berlin, Zurich, Amsterdam, Milan, New York, Hong Kong, Seoul and Tokyo, IFM manages investments across infrastructure, debt, listed equities and private equity assets.
For more information, visit www.ifminvestors.com.
QIC Limited ACN 130 539 123 (“QIC”) is a wholesale funds manager, and its products and services are not directly available to, and this document may not be provided to any, retail clients. QIC is a company government owned corporation constituted under the Queensland Investment Corporation Act 1991 (QLD). QIC is also regulated by State Government legislation pertaining to government owned corporations in addition to the Corporations Act 2001 (Cth) (“Corporations Act”). QIC does not hold an Australian financial services (“AFS”) licence and certain provisions (including the financial product disclosure provisions) of the Corporations Act do not apply to QIC. Other wholly owned subsidiaries of QIC do hold AFS licences and are required to comply with relevant provisions of the Corporations Act. QIC also has wholly owned subsidiaries authorised, registered or licensed by the United Kingdom Financial Conduct Authority (“FCA”), the United States Securities and Exchange Commission (“SEC”) and the Korean Financial Services Commission. For more information about QIC, our approach, clients and regulatory framework, please refer to our website www.qic.com or contact us directly.
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