A superannuation fund from Australia is investing billions of dollars to support the shift towards renewable energy in Britain.
The massive Australian investment company IFM Investors has committed to investing £10bn (A$19bn) in infrastructure and projects for transitioning to clean energy in Britain by 2027, under a newly established agreement with the Sunak administration.
IFM, a company owned by 17 Australian industry super funds, has made a decision. This comes at the same time as a coalition of business and environmental organizations urges the Albanese government to enhance tax and financial incentives in order to attract enough capital to facilitate Australia’s shift to net zero emissions.
The memorandum of understanding (MoU) between IFM Investors and the British minister for investment will be officially signed at the Global Investment Summit in London. Kemi Badenoch, the UK’s secretary for business and trade, described the partnership with IFM as a significant investment in the country’s energy and infrastructure industries.
According to IFM, as of June 30, 2023, they have around A$217 billion in assets under management. They believe that there are promising investment prospects in the energy transition of Britain due to its favorable investment environment.
Deepa Bharadwaj, the head of infrastructure for Europe at IFM, stated that there are currently ample opportunities for investment in the deployment of various renewable energy sources in the UK, including offshore wind, solar power, battery storage, renewable fuels, and pumped hydro.
IFM is increasing its investment portfolio in the UK, prompting a joint statement from the Australian Industry Group, the Australian Conservation Foundation, the Australian Council of Trade Unions, the Investor Group on Climate Change, and WWF Australia. The statement warns that Australia may fall behind in the competition for international capital.
Last week, it was confirmed that taxpayers will fund the revamping of Australia’s energy grid by significantly increasing the capacity investment scheme. This is considered the most significant development in climate and energy policy in the past ten years. The government plans to support the construction of 32GW of new electricity, including 9GW of storage and 23GW of variable renewable generation.
The Albanese administration has been under pressure to address the Biden administration’s Inflation Reduction Act. This act includes A$560 billion in support for clean energy and has intensified the global competition for investment in climate-focused initiatives.
The government plans to broaden its Hydrogen Headstart program, which has a budget of $2 billion, and may also use this approach in other sectors to address the obstacles presented by the IRA. Business and environmental organizations urge the Australian government to act promptly.
The joint statement states that countries such as the United States of America, Europe, and Canada have implemented significant financial incentives and supportive policies to facilitate their transitions, resulting in increased private investments.
The flow of global capital, skills, and supply chains is driven by economic opportunities. If Australia does not implement effective and tailored incentives that align with our economic strengths and values, we will fall behind.
The organizations acknowledge the current climate and energy policies put in place by Labor, but they believe there is a need for further action. This includes increased investment, decarbonization strategies for each sector, quicker implementation, and improved coordination in implementing policies that drive reductions in emissions throughout the economy.
The groups are urging the Australian government to take immediate action and utilize a range of policy tools, such as financial and tax incentives, to capitalize on global resources and promote necessary skills and supply chains. They believe that this is a crucial opportunity with both vast potential and significant challenges.
Chris Bowen, the Minister for Climate Change and Energy in Australia, will present a yearly statement on climate change to parliament and share a recent evaluation of Australia’s advancements by the Climate Change Authority. He will then attend the Cop28 summit in the United Arab Emirates.