Changing energy landscape fuels infrastructure investing
Asset owners are pushing hard into renewable energy and sustainable infrastructure while still committing capital to other projects supporting the fossil-fuel energy segment, albeit at lower levels.
Sustainability is a big theme right now as investors become more attuned to the risks and investment opportunities inherent in a changing energy environment. At the same time, they are attracted to infrastructure as a whole to shield their portfolios from inflation threats and potential increases in interest rates.
As a result, infrastructure fundraising reached $31.8 billion in the second quarter, beating the previous fundraising high point in the first quarter of 2020 and the quarterly average of $24.5 billion since the start of 2016, according to data provider Preqin. Renewable energy has been taking a bigger share of the fundraising capital commitments. In the first quarter, 65% of the infrastructure capital raised was for renewable energy, with 9% for utilities and 8% for conventional energy, according to Preqin.
Of the infrastructure energy funds closed in 2021 through Sept. 16, 80% were renewable energy funds, compared with 14% mixed renewable and traditional energy and 6% non-renewable energy funds.
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