APG commits over $650m to Octopus Australia’s renewable energy platform

Dutch pension fund investor APG has announced a major new commitment targeting opportunities in wind, solar and energy storage.

APG Asset Management has announced that it will commit over $650m (A$1bn) to Octopus Australia’s Sustainable Investment Fund (OASIS). The fund is an open-ended Australian unit trust that targets investment opportunities in renewable energy infrastructure across the country.

APG, a Dutch pension fund investor, manages over €590bn on behalf of over 4m pension fund participants. The fund says its decision reflects investor confidence in long-term demand for renewable energy infrastructure.

OASIS targets investment opportunities in wind energy, utility-scale solar and battery storage. The target total return from OASIS is set at 10-12% per annum and the fund’s portfolio derives revenue from long term energy sale contracts as well as wholesale energy trading.

“Our partnership with Octopus Australia represents a substantial opportunity to drive meaningful impact around critical climate priorities with best-in-class renewables projects that are strongly positioned to generate value for decades to come”, said Hans-Martin Aerts, head of infrastructure and private natural capital across Asia Pacific at APG.

APGs Climate Action Plan, initially published in December 2022, includes a commitment to not only achieve net zero portfolio emissions by 2050 but also increase climate solutions investments over time in line with emissions reduction targets set by its pension fund clients.

The decision to partner with Octopus Australia also reflects confidence in the country’s renewable energy roll-out.

By 2030, the Albanese government is aiming to reduce emissions by 43% and increase the share of renewable energy to 82%. The country’s net zero pathway is set against the backdrop of policy tailwinds such as the capacity investment scheme and a ‘generational shift’ in climate disclosures.

“We are looking forward to deepening our collaboration with Octopus Australia as we meet substantial demand for high-quality renewable energy infrastructure in key markets like Australia and support the wider energy transition needed across the world’s highest emissions regions”, Aerts notes.

“This partnership marks a transformational moment for both our business and the broader Australian energy landscape,” commented Sam Reynolds, CEO of Octopus Australia.

“To be chosen as the local partner by a global investor of APG’s calibre is a powerful endorsement of our strategy and team and is a reflection of Australia’s position as a leading destination for long-term, sustainable infrastructure investment”, he added.

By investing in OASIS, APG will join an existing investor base that includes Australian superannuation funds Rest and Hostplus as well as Australia’s government-backed Clean Energy Finance Corporation. The announced investment is subject to regulatory approvals.