Perspectives
17 September 2025
Infrastructure projects are increasingly complex, involving ever-greater levels of engagement with growing numbers of stakeholders – from communities and regulators to investors and strategic operators. While in the case of public spending, projects face scrutiny as governments come under pressure to demonstrate measurable productivity gains from their capital outlays.1
A consequence of all of this is that advisers need to be better at knowing where the optimal opportunities lie, says Tom Butcher, Executive Director and Head of Infrastructure, Asia Pacific, at Macquarie Capital. And a prime example of this is in the renewables space.
As a vast country with an abundance of sunshine and wind – together with its stable government, growing economy and strong rule of law – Australia’s opportunity has always been clear. Even with greater pragmatism now part of the energy transition story, the direction of travel remains towards renewable energy, and Australia remains an attractive opportunity for investors.
“There’s plenty of demand from private and listed markets to pursue transactions and investment in the renewables space. There is also plenty of opportunity, be it grid, electrons, pipelines and molecules,” Butcher says.
Our infrastructure team’s scale, deep expertise and activity in the sector means we understand both sides and can find and connect the right opportunities in this new era.”
Tom Butcher
Executive Director and Head of Infrastructure, Asia Pacific
Macquarie Capital
Global investors in infrastructure and the energy transition are increasingly taking a more nuanced approach to the way they invest their capital. Investors are moving from a ‘divest/invest’ approach, which saw selling carbon-exposed assets to reinvest in renewables, to a more holistic approach of supporting an orderly transition, through continued investment in assets related to natural gas and an increasing focus on energy storage assets.
“Investment to support energy security and the infrastructure required to enable the transition to renewable energy is about more than meeting net zero commitments," says Joanne Spillane, Executive Director and Global Head of Private Capital Markets at Macquarie Capital. “It’s about opportunities to deliver risk-adjusted returns to these investors based on practical and rational business plans with timetables for delivery that are achievable.”
A better understanding of the physical challenges in achieving net zero – such as integrating and upgrading transmission networks with effective firming to support intermittent renewable generation – has driven a much more pragmatic view of what the energy transition means and requires.
“While developers are building out new wind and solar generation and coal-fired generators are ageing and becoming increasingly unreliable, the demand for electricity is growing, spurred by growing energy loads of data centres in particular. This has led to a focus on ‘energy pragmatism’ – the view, for example, that natural gas needs to be part of our energy mix and support an orderly transition – and that provides an opportunity for investors and users,” Spillane says.
This is not just an Australian story. It is a global story, with a focus on the trillions of dollars2 required to establish and upgrade transmission grids to enable new sustainable generation to be plugged in.
A focus on ‘energy pragmatism’ – the view, for example, that natural gas needs to be part of our energy mix and support an orderly transition – provides an opportunity for investors and users.”
Joanne Spillane
Executive Director and Global Head of Private Capital Markets
Macquarie Capital
“Given the long-dated nature of renewable assets and sheer scale of the build-out required, decisions made in the next five years will be felt across the next four decades,” says Danish Aleemullah, Division Director and Head of Energy and Renewables, Australia, at Macquarie Capital.
The Australian energy sector has never had to tackle a task of this magnitude. The considerations at play include what the appropriate mix is for the creation of energy, the forms of storage and capacity that need to be deployed in support of that, an efficient buildout of the electricity and natural gas networks, and the maintenance of system strength throughout this journey.
This process isn’t limited to large-scale projects; what happens in homes and businesses is just as critical. The continued installation of rooftop solar and rapid uptake of battery systems is impacting energy consumption patterns and there’s an expectation that these ‘small assets’ will be orchestrated to play a growing role in managing system wide issues.
“How policies are set and where capital is deployed will drive the costs to energy users for many years to come. A strategic approach to investment and drawing upon industry expertise will make a substantial difference to return outcomes,” says Aleemullah.
Businesses and deployers of capital now need bespoke advice and tailored business models, he adds.
“The draw on capital is huge and the make-up of projects is very diverse. It’s why you need to hear from people that have spent time in the sector, matching technical and financial requirements.”
A strategic approach to investment and drawing upon industry expertise will make a substantial difference to return outcomes.”
Danish Aleemullah
Division Director and Head of Energy and Renewables, Australia
Macquarie Capital
The deeper understanding of the energy transition, and therefore the assets that provide higher returns and lower volatility, has resulted in a change in the volume of investment and identity of investors.
“A new cohort of investors and developers are entering the Australian market as others recycle capital or exit,” says Jessica Edwards, Division Director at Macquarie Capital specialising in renewables and transport.
Financial investors continue to target higher returning opportunities in the energy sector such as development activities, she says.
Also, many of the large renewables platforms, having come to market over the past three years, are now focused on achieving scale, delivering new assets, optimising operations and funding and attacking the various market opportunities their model presents.
“Now you need to knit together a transaction, and that takes a lot of skill and advisory bench strength,” Edwards says. “There might be someone looking for a capital partner, someone looking to exit assets and a fund investor looking for a particular type of asset. That takes a lot of conversations, knowing what’s going on in markets and deep expertise.”
A new cohort of investors and developers are entering the Australian market as others recycle capital or exit.”
Jessica Edwards
Division Director specialising in renewables and transport
Macquarie Capital
The resources industry is a case-in-point, says David Wickstrom, Division Director at Macquarie Capital specialising in resources infrastructure and renewables. Mines are using more electricity as ore bodies are extracted at greater depths, de-watering increases, and diesel and natural gas is swapped out for electrified equipment.
“Electrification is where we see the next big step-change in the resources industry. Many remote mines are not connected to traditional grids, so they are reliant on building and operating their own power plants,” Wickstrom says.
KKR’s acquisition of Zenith Energy is a prime example of the intersection of resources and infrastructure.
Kathleen Valley Lithium Project in Western Australia
Zenith builds large-scale, hybrid, renewable plants that combine wind, solar, battery and back-up diesel and gas. These hybrid plants can enable sites to operate using up to 100 per cent renewable energy.3
Macquarie Capital advised KKR on the acquisition of Zenith, leveraging our understanding of the WA resources sector and Zenith’s customers.
Macquarie Capital also advised Transgrid, Australia’s largest electricity network operator, on funding its $A5 billion HumeLink project in southern NSW, which includes 365 kilometres of new transmission lines.4 The project will receive up to $A1.9 billion of funding from the Clean Energy Finance Corporations’ (CEFC) Rewiring the Nation Fund.5
Project Humelink transmission lines connecting Wagga Wagga, Bannaby and Maragle
“We brought to Transgrid an innovative CEFC financing structure that leverages its existing business and access to capital, which works for all parties, and ultimately facilitated five individual securityholders committing to fund the $A5 billion project,” says Xavier Eid, Division Director at Macquarie Capital specialising in utilities and transport.
“We achieved that by combining our knowledge of regulated infrastructure with financial expertise, and having strong relationships with the CEFC, Transgrid and its securityholders – knowing what was, and wasn’t, going to work for them,” adds Eid.
The project was not financeable without Rewiring the Nation funding, and ultimately a hybrid and concessional loan arrangement was negotiated with the CEFC. Transgrid securityholders could make the decision to invest because the return they were getting was commensurate with the risk of the project, Eid says.
As businesses and investors refine their strategies, the focus has shifted to actionable opportunities. What began as a momentum-building journey has now evolved into a defining moment for the nation’s infrastructure landscape, setting the stage for a future where progress isn’t just imagined - it’s built.
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