IFM and QIC scoop major assets in energy deal

Two of the nation's largest infrastructure fund managers have attracted major assets to its A$700 million renewable energy program.

Critical infrastructure assets and healthcare assets have signed on to the final stage of a power purchase agreement (PPA) deal to reduce energy costs and market volatility.

The agreement sees assets becoming approved PPA providers.

They include Sydney Airport, Adelaide Airport, Port of Melbourne, PRP Diagnostic Imaging, Lochard Energy, Nexus Hospital, and Healius Limited.

IFM and Queensland government-owned QIC will sign the assets on to renewable PPAs to provide over 500 gigawatt hours of energy, equivalent to approximately 260,000 tonnes of carbon dioxide annually.

Australian industry pension fund-owned IFM and specialist alternatives manager QIC collectively oversee more than A$140 billion of infrastructure assets.

The deals were structured by independent renewable energy markets and sustainability advisory firm CORE Markets, with Iberdrola, Squadron Energy, Origin Energy and Stanwell as suppliers.

Seven critical infrastructure assets were previously signed on since 2022, including Brisbane Airport, Melbourne Airport, NSW Ports, Southern Cross Station, Ausgrid, Nexus Hospitals, NorthWestern Roads Group's WestLink M7 and Transurban's CityLink.

Under the programme, Melbourne Airport was the first Australian airport to become an accredited GreenPower provider.

Michael Hanna, head of infrastructure Australia at IFM Investors, said the deals align with the firm's target of net zero Scope 1 and 2 emissions by 2050.

Hanna added that the agreement will help sure up returns for members while reducing risk.

"Generating long-term returns for our investors and the working Australians they represent means managing and mitigating the risks posed by climate change."

Ross Israel, head of global infrastructure at QIC, said the deal reduces assets' "exposure to energy market volatility and delivering cost-savings through renewable energy."

"The renewable PPA program 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' portfolio."