For Australian financial advisers and wholesale clients (as defined in section 761G of the Corporations Act) only. The Macquarie Energy Transition Infrastructure Fund is only open to investment by Australian wholesale clients.
October 27, 2025
The global shift to clean energy is now too big to ignore – and we believe that infrastructure investors are poised to benefit.
Speaking in Australia at a series of private wealth events, Chris Leslie, Senior Managing Director, Macquarie Asset Management Green Investments, described the energy transition as one of the largest investment opportunities of our lifetime.
Despite some political headwinds, the shift from fossil fuel-based energy to newer sources has already crossed the tipping point and is rapidly scaling around the world. Beyond the decarbonisation of electricity, new fuels for industry and transport are driving the next wave of opportunities in infrastructure investments.
From batteries and EV chargers to data centres, the infrastructure investable universe has come a long way since Macquarie set up the world’s first infrastructure fund in 1994.
“Infrastructure assets provide essential services to society,” said Leslie. “That’s what makes it a defensive investment, which also provides upside potential.”
Renewables and green energy assets fit this profile. They are large, capital-intensive projects with long asset lives – and often backed by long-term revenue contracts (power purchase agreements) to deliver stable cash flows.
Defensive with upside
In today’s market, investors are seeking a balance between growth and preservation of capital, yield and inflation protection. Infrastructure targets all those requirements.
Macquarie Asset Management (MAM) is recognised as a global pioneer in this space, effectively writing the playbook for how infrastructure deals are funded by private capital.
“We see these assets differently to the way a private equity or real estate investment might play out,” explained Leslie. “If you chase IRR (internal rate of return), you won’t necessarily get the defensive benefits of infrastructure.”
Four forces driving renewables
Infrastructure’s defensive advantage often becomes clear in times of market volatility, and these four major macro trends make a strong case for including renewables in the infrastructure mix.
1. Accelerating energy demand
U.S. electricity demand is forecast to grow ~2.5% per annum through to 20351, after being relatively flat for the last 20 years. Data centres are set to account for a large share of this, driven by AI, cloud and digital services, and the major tech companies have tended to have a bias towards green power when they enter into long-term power purchase agreements. The electrification of transport and industry will add further pressure.
2. The economic equation
Renewables are not just an impact play, they make economic sense. They are now the fastest source of energy to bring to market, and in the case of solar and onshore wind, often the cheapest. Even in the U.S. with tariffs, they remain a cost-effective alternative to gas, as gas-fired generation costs are up to 2.5 times higher than they were just a few years ago.2
“The U.S. has brought just three new nuclear reactors online in the 21st century – two of which are at Plant Vogtle, which were years behind schedule and cost nearly $US 35 billion, more than double the original $US 14 billion estimate3,” observed Leslie. “Meeting U.S. demand growth with nuclear would require adding dozens of reactors annually, according to U.S. Department of Energy targets.4 In Australia’s context, scaling by relative electricity demand, that would equate to building over 30 reactors per year.”5
3. Targets, funding, and market incentives
While the EU has led the way in making clean energy a matter of public policy, the U.S. has experienced a regulatory shift. Following a few months of uncertainty, clarity is emerging, and Leslie is seeing a race to start construction.
“U.S. policies currently benefit established players who can operate quickly in a constrained environment. This is not the moment to invest in a start-up renewables business,” he said.
4. Innovation and disruption
From sustainable aviation fuels to turning agricultural waste into natural gas, the green energy sector is finding new ways to meet demand and manage climate risks.
MAM continues to monitor how energy markets respond to this shift. If sun and wind have near-zero marginal costs, it could begin to distort traditional market pricing mechanisms.
With these macros in mind, our infrastructure managers are taking a pragmatic view of the near-term energy mix. Leslie expects wind and solar to form the core, with gas and batteries maintaining reliability.
Looking further ahead, he believes green hydrogen might come through but looks challenging. And while small modular nuclear reactors may become investable within a decade or so, large nuclear rollouts are currently seen as too risky for infrastructure investors.
Active management for growth
MAM’s infrastructure portfolios are diversified across core, core plus, value-added and opportunistic investments – with the aim of combining stability with growth potential. Contracted renewables are now considered core plays once built, while additional returns can come from development and construction.
For example, the Macquarie Energy Transition Infrastructure Fund (METI) includes exposure to Treaty Oak Clean Energy, a U.S. renewable energy company with a business model to develop, commercialise, build, own and operate solar and energy storage assets.
MAM had previously invested in Galehead, a leading renewable project delivery platform. Combining Treaty Oak’s robust site selection capabilities with Galehead’s software and data created a potential growth engine for the portfolio, continuously developing and constructing new income-producing assets.
Building wealth with infrastructure
Infrastructure is a long-term investment that builds steadily over time. It might not promise the dazzling returns of private equity, but it can provide attractive risk adjusted returns with the potential for defensive attributes.
“If you own assets that are delivering attractive risk adjusted returns over extended periods of time, you can build significant wealth,” noted Leslie. He warns investors to look past IRRs and focus on how infrastructure multiples compare with investments of similar risk.
And, he added, always ask: is it really infrastructure? “Just because it’s big and made of concrete, doesn’t mean it’s infrastructure,” he said. Look for limited price competition, CPI-linked cash flows – and above all, high confidence your capital will be returned.
- U.S. electricity demand to grow 2.5% annually through 2035: BofA Institute (Utility Drive, 2025)
- US gas-fired turbine wait times as much as seven years; costs up sharply: S&P Global, 2025
- 'New Vogtle nuclear unit begins commercial operations in 2024, one of only three new U.S. nuclear reactors online in the 21st century, U.S. Energy Information Administration (EIA).
- U.S. sets targets to triple nuclear energy capacity by 2050, U.S. Department of Energy, Office of Nuclear Energy.
- Electricity demand data (U.S. ~4,500 TWh vs. Australia ~265 TWh in 2022). Scaling by demand shows that matching U.S. nuclear expansion would require >30 reactors annually in Australia, assuming a typical ~1 GW per reactor. International Energy Agency (IEA)
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